UBS published a research note on Wednesday, raising its price target for Berkshire Hathaway Class A shares by 3% to $877,848 from $854,596, while keeping a “Buy” rating. However, weighed down by the broader market, Berkshire Hathaway shares edged lower on Wednesday following a gain on Tuesday.

UBS analyst Brian Meredith pointed out that the price target increase is primarily driven by two factors. First, the robust performance of Berkshire Hathaway's equity portfolio, valued at approximately $358 billion, with major holdings such as Apple and Coca-Cola trading near all-time highs. Second, the company is expected to engage in significant share repurchases in the second quarter, with a buyback range potentially between $5 billion and $11 billion.

Meredith also raised his earnings estimates for Berkshire Hathaway in the second quarter and for the full year, citing improvements in the BNSF railway business's profitability and lower-than-expected catastrophe losses. UBS believes that Berkshire Hathaway shares are still trading at roughly an 8% discount to their estimated intrinsic value.

So far this year, Berkshire Hathaway shares have significantly underperformed the broader market. The Class B shares have gained about 2% year-to-date, while the S&P 500 index has returned around 9% over the same period. Market analysts suggest that since Warren Buffett announced his retirement as CEO last year, investors have adopted a wait-and-see approach toward the new management, with new CEO Greg Abel officially taking over earlier this year.

In terms of price, Berkshire Hathaway Class A shares closed at $768,010 on Tuesday, while Class B shares closed at $512.37. On Wednesday, the overall market weakened, and Berkshire Hathaway shares followed the broader market trend, retreating slightly.