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.
