Andrew Bary

UBS analyst Brian Meredith boosted his price target on Berkshire Hathaway stock in a recent note, calling the company a "safe haven in a turbulent environment."

Meredith, who has a Buy rating on the stock, lifted his 12-month price target on the A shares to $909,218 from $836,135. The note was dated last Thursday, April 24.

Berkshire's class A shares are down 0.6% Monday to $790,955 while the class B stock is off 0.5% to $528.22. The class A shares are up 16% so far this year, far outpacing the S&P 500 index, which is down 6%. Meredith's target is about 15% above the current stock price.

Meredith has the highest price target on the Street. Berkshire is lightly covered despite a market value of $1.1 trillion with only a handful of analysts following Warren Buffett's conglomerate. The company's complexity is a deterrent, as is the lack of analyst access to Berkshire management.

"While BRK's shares have meaningfully outperformed YTD and are trading near historical high valuations., given its substantial cash position and generally defensive business mix, we believe its shares deserve a premium in the current uncertain economic environment," Meredith wrote.

Meredith noted that Berkshire is trading for about 1.7 times book value, the high end of its range in the past decade, and for a 14% premium to Meredith's estimate of intrinsic value of about $688,000 per A share, compared with a 19% average discount since Berkshire began its current share-buyback program in 2018. Intrinsic value is a sum-of-the-parts analysis for valuing Berkshire favored by Buffett and used by analysts and investors.

Berkshire has not bought back stock since May 2024 based on figures through early March, an indication that Buffett doesn't view the stock as cheap.

Berkshire reports first-quarter earnings on Saturday, and holds its annual meeting on the same day in Omaha.

Meredith sees first-quarter operating earnings of $7,932 per class A share, up about 2% year over year, and about 10% above the consensus estimate. He sees book value rising nearly 2% sequentially to around $460,000 per class A share. He sees no share buybacks for the entire quarter.

Meredith sees Geico, Berkshire's auto insurer, showing year-over-year policy growth for the first time in 12 quarters as the company boosts marketing spending after returning to strong profitability in recent quarters.

The annual meeting will be a key opportunity for investors to hear Buffett, 94, at what could be one of his last annual meetings. He will answer shareholder questions for more than four hours.

Meredith wrote that investors may ask Buffett about Geico's progress, the impact of tariffs, and a potential recession on Berkshire's businesses and uses of cash with the company sitting on over $300 billion of cash and equivalents.

Write to Andrew Bary at andrew.bary@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 28, 2025 14:54 ET (18:54 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.