Please be open to feedback and constructive criticism from others, and consider their suggestions and advice when making decisions or forming opinions.
- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 4
Probably reason for the stock drop ..
12:14 PM EDT, 06/03/2025 (MT Newswires) -- Berkshire Hathaway's(BRK/A) (BRK.A, BRK.B) 2025 and 2026 earnings per share estimates were reduced to reflect lower investment income driven by a decline in dividends and cash yields as well as the elimination of share repurchases, UBS Securities said in a note emailed Tuesday.
The firm said its new EPS estimates are $29,882 per A share for 2025 and $32,972 for 2026, compared with $31,789 and $33,355 respectively.
The company is not expected to repurchase shares in 2025 or 2026 due to the stock trading at about a 9% premium to intrinsic value and Chief Executive Warren Buffett or incoming CEO Greg Abel, who will assume the post by the end of the year, will likely only authorize repurchases when shares are attractively priced, according to the note.
The firm said GEICO is expected to return to stronger underwriting results, with its combined ratio improving to target levels by 2027. This is viewed as a meaningful offset to some of the negative earnings pressures and is seen as a catalyst for strengthening Berkshire's insurance earnings and float.
UBS reduced its price target to $887,099 from $909,218 for the A shares and $591 from $606 for the B shares, while maintaining a buy rating.
No. of Recommendations: 0
Thanks, I saw CB was down 1.6 % so I figured someone downgraded that group.
No. of Recommendations: 1
to reflect lower investment income driven by a decline in dividends and cash yields
Is that true? Apple dividend was 0.6%. BAC 2.65%. Treasuries are 4.3%.
They lost $20-25B in capital gains taxes that won't earn anything now.
They might lose some capital appreciation on those shares.
I agree it stinks that they can't buy shares back at a low price but finding a CEO that doesn't throw capital at borderline investments is the holy grail.
9% overvaluation, I understand. I just question their reasoning.
No. of Recommendations: 1
Re the UBS Securities report:
"The company is not expected to repurchase shares in 2025 or 2026 due to the stock trading at about a 9% premium to intrinsic value ...." It's now circa $750k per A share - which means circa $680k an A share for UBS's IV estimate.
And,
"UBS reduced its price target to $887,099 from $909,218 for the A shares ...."
How can they come up with a price target of circa $900k a share? That's 32% ABOVE their implied IV from the above.
I know Wall Street analyst have unusual insights. But this one escapes me.
Maybe I just don't understand Wall Street math. Is this a multi-year outlook? What year?
I don't necessarily disagree with their IV estimate. But the price target???
No. of Recommendations: 2
“ 9% overvaluation, I understand. I just question their reasoning.“ Did he warn that the stock was 15 - 20 percent above IV when it was 535?
No. of Recommendations: 10
Who the f**k cares what UBS thinks?
You also have to understand these wealth "mismanagement" firms like UBS hate for their clients to put a significant % of their wealth in BRK and just sit on their ass. UBS makes money when there is a lot of "action".
No. of Recommendations: 11
<<I don't necessarily disagree with their IV estimate. But the price target???>>
I wouldn’t put too much faith in this, and I think the price target is pretty random. And somewhat open ended on time…which is convenient :) They WERE among the most Bullish with a price target of $606 and still ARE—having reduced it to $591. Is that downgraded from “Madly in love” to just “strongly in love”?
And the reasons for downgrade? The stock is so loved Warren & Greg might not get a good future entry price. Which is Yogi Berra-like “no one goes to that restaurant anymore, the lines to get in are forever”…
And, the observation that short rates may not stay high for long which is not exactly keen insight.
Despite these “warnings”—UBS “warns” the stock price may only rise 20% ..in an undetermined time.
This is kind of gobbledygook that qualifies as “analysis” —and moves prices a lot.
No. of Recommendations: 0
“no one goes to that restaurant anymore, the lines to get in are forever”
Nobody goes there anymore, it's too crowded! 😆
