No. of Recommendations: 1
BerkshireHathaway reportedstrong
resultsduringtheSeptemberquarter.
Operating earnings per share, which ex
cludescapitalgainsandlossesfromthein
vestment portfolio, dialed in at $6.25,
whichrepresentsa34%advance fromthe
previousyear’s figure.Thecompany’sP/C
insurance underwriting operations were
thebelleoftheballduringtheperiod,gen
erating nearly $2.4 billion in pretax in
come, compared to $750million in last
year’s comparable period. Investment in
comeof nearly$3.2billion lent ahelping
hand, thoughthat figureddeclinedmoder
atelyonayear-over-yearbasis. The com
pany’s other (non-insurance) divisions
were generallypositive, despite beingup
against strong2024 comparisons.We be
lieve that earningsmightwell decline in
theDecemberperiodagainst averydiffi
cult2024comparisons.
Welookfortheindustrygianttoreg
ister a solidyear-over-year earnings
improvement as we look towards
2026. The company is poised to benefit
fromlikelysolidconditions inthebroader
insurance market, along with healthy
company-specific fundamentals. Supply
and demand dynamics remain robust in
theinsurancesector,whichhasresultedin
pricing gains acrossmost product lines.
Webelievethistrendispoisedtocontinue,
ascapacitylevelsareatmanageablelevels
atpresent.Berkshireispositionedtocapi
talize on a still-solid market, given its
strongunderwritingdiscipline. Infact,we
look for the company’s combined ratio to
stay under the all-important 100%level,
barring an overage of catastrophes. One
line itemtokeepaneyeonis investment
income, whichmight well begin to fell
some pressure due to the Federal
Reserve’seasingmeasures.For the3to5
years ahead, we look for earnings per
sharetobeintheneighborhoodof$30.00.
Thesesharesofferworthwhilecapital
appreciationpotential for thepull to
2028-2030. Acquisitions, whicharen’t in
cluded inour presentationuntil theyare
consummated,wouldaddmeaningfully to
our long-termforecast. Infact,purchasing
other companies has been part of Berk
shire’sgameplanforquitesometime.For
theyear ahead, though, these shares are
rankedtobemarketlaggards.
AlanG.House November28,2025
