UBS analysts raised their price target for Berkshire Hathaway (NYSE:BRK-B) to $538 from $506, citing the conglomerate’s stock trading at a slight discount to its intrinsic value. The firm also boosted its forecast for Berkshire’s third-quarter earnings per share, pointing to improved underwriting performance and a lower-than-expected estimate for catastrophe losses.
Despite the positive outlook for the third quarter, UBS noted that Berkshire’s earnings could face pressure in the fourth quarter due to the anticipated rise in catastrophe losses from Hurricane Milton, which recently hit the US South.
Insurance remains a vital part of Berkshire Hathaway’s business, with major subsidiaries like Geico, National Indemnity, and General Re playing key roles. In addition, Berkshire revealed a significant stake in insurer Chubb, valued at approximately $6.7 billion earlier this year.
Beyond insurance, Berkshire continues to maintain a diverse portfolio spanning various sectors, including railroads, banking, consumer goods, and retail. UBS estimated that Berkshire’s common equity portfolio grew by 7% in the third quarter, driven primarily by its holdings in Apple, American Express, and Coca-Cola.
Furthermore, UBS analysts predicted that Berkshire would deploy around $1.9 billion in share buybacks during the quarter, signaling confidence in its long-term value and financial strength. This combination of strong portfolio performance and disciplined capital management contributed to the increased price target.