Investment Outlook for Berkshire Hathaway

Analysts at UBS have raised their price target for Berkshire Hathaway (NYSE: BRKb) shares, stating it is currently trading at a "1% discount to its intrinsic value."

In a note to clients on Sunday, the analysts upgraded their stock price target for Berkshire to $538 from $506. They also increased their forecast for the company's third-quarter earnings per share, citing a "modestly lower catastrophe loss estimate" and improved underwriting results in reinsurance.

However, an expected rise in catastrophe losses in the fourth quarter due to Hurricane Milton, which recently affected parts of the US South, may impact Berkshire's projected annual per-share income.

Insurance plays a significant role in Berkshire’s business, with subsidiaries including Geico, National Indemnity, and General Re. In May, Berkshire revealed a major stake in insurer Chubb (NYSE: CB) valued at approximately $6.7 billion.

Berkshire continues to maintain a broad range of investments across various sectors, including railroads, banks, running shoes, and ice cream.

In late August, Berkshire's market capitalization topped $1 trillion for the first time, positioning it alongside tech giants like Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). It has since dipped to roughly $998.6 billion.

For the first half of the year, Berkshire, led by 94-year-old Buffett since 1965, recorded $22.8 billion in profit, marking a 26% increase from 2023.

UBS analysts estimated that Berkshire's common equity portfolio saw 7% growth in the third quarter, primarily driven by increases in its Apple stake, credit card firm American Express (NYSE: AXP), and food and beverage leader Coca-Cola (NYSE: KO). Furthermore, Berkshire is anticipated to announce nearly $1.9 billion in share buybacks during the quarter.