The stock of Berkshire Hathaway is up 4% and trading at an all-time high as analysts upgrade the shares following the company’s strong fourth-quarter 2024 financial results.
Wall Street analysts Meyer Shields of KBW and Brian Meredith of UBS (UBS) have each raised their price targets on Berkshire’s Class A stock after the company delivered its Q4 2024 print on Feb. 22. Meredith reiterated a Buy rating on the stock and lifted his price target to $836,135 from $803,444. Shields boosted his price target on Class A stock to $775,000 from $750,000 while maintain a market perform rating.
The price target increases come after Berkshire Hathaway reported record operating earnings after taxes of $14.50 billion for Q4 2024, up 71% from a year earlier. The earnings amounted to about $10,100 per Class A share, 40% higher than the consensus estimate. The big increase in operating earnings was largely driven by the company’s insurance unit.
Cash Pile
While Berkshire Hathaway’s financial results were impressive, what really grabbed the attention of journalists and investors was the company’s record cash pile of $334.20 billion, up from $325.20 billion at the end of the third quarter. The cash pile has swelled as Buffett continues to sell the company’s equity holdings, notably its two biggest stock positions: Apple (AAPL) and Bank of America (BAC).
In his annual letter, Buffett said he is struggling to find investments and defended the large cash holding. “Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change,” wrote Buffett in the letter.
Some shareholders have grown frustrated with the cash horde and called on Buffett to pay a cash dividend, something Berkshire has never done. Berkshire Hathaway’s more affordable Class B stock has risen 10% this year.
Is BRK.B Stock a Buy?
Berkshire Hathaway’s Class B stock currently has a Moderate Buy rating based on one Buy recommendation issued in the past three months. The average BRK.B price target of $536 implies 7.76% upside from current levels.
