No. of Recommendations: 6
There is big news coming out of Berkshire Hathaway. Icon Warren Buffett will leave his post as Chief Executive Officer at the end of this year. The 94-year-old has led the conglomerate for more than 60 years and has transformed it from a relatively small textile company to a more than $1-trillion powerhouse.
Despite stepping down, Mr. Buffett will remain as Chairman of the board of directors and continue working from his Omaha office. Mr. Buffett has an exceptionally strong investment track record and has handily outpaced the performance of the S&P 500 Index over the decades.
Greg Abel will take over as CEO effective January 1, 2026. Mr. Abel currently serves as the Vice Chairman of Berkshire Hathaway, overseeing its non-insurance operations, and is also the Chairman and CEO of Berkshire Hathaway Energy. He has been with the company since 2000.
While it’s very difficult to replace a legendary investor such as Mr. Buffett, we believe that the company will be in good hands. Mr. Abel has been effective at managing and implementing changes within the company.
In other news, we look for the company’s results to remain strong on an absolute basis this year. While profits might well take a step back from last year, they are up against a difficult comparison. We look for most of the company’s operating segments to perform well this year, while above-average investment returns—which are a common occurrence at Berkshire—ought to further propel growth. We expect bottom-line progress to resume next year.
We forecast that earnings will hit the $30.00-a-share mark by the 2028-2030 time frame. Berkshire has a history of outperforming expectations, and we believe that this should continue with a new CEO at the helm.
These shares offer worthwhile risk-adjusted total-return potential for the pull to 2028-2030. Acquisitions, which aren’t included in our projections until they are consummated, could add meaningfully to our long-term projections. Berkshire has been a big player in the acquisition game for quite some time, and we believe that strategy will continue given its strong finances.
