UBS raises stock price target for Warren Buffett's Berkshire Hathaway

Investing.com -- Analysts at UBS have raised their price target for shares in Berkshire Hathaway (NYSE:BRKa) (NYSE:BRKb), arguing that Warren Buffett's investment conglormerate is currently trading at a "1% discount to its intrinsic value."

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

However, an expected uptick in catastrophe losses in the fourth quarter due to the recent devastating Hurricane Milton that hit parts of the US South is seen denting Berkshire's annual projected per-share income.

Insurance is a key portion of the Berkshire's business, with firms like Geico, National Indemnity and General Re all subsidiaries of the company. In May, Berkshire also disclosed a major stake in insurer Chubb (NYSE:CB) that was worth a reported $6.7 billion.

However, Berkshire still maintains a wide-range of investments across a broad range of sectors, from railroads and banks to running shoes and ice cream.

In late August, Berkshire's market capitalization closed above $1 trillion for the first time, giving it a valuation to rival technology giants like iPhone-maker Apple (NASDAQ:AAPL) and artificial intelligence-chip designer Nvidia (NASDAQ:NVDA). It has since moved back down below that mark to roughly $998.6 billion.

For the first half of the year, Berkshire, which has been run by the 94-year old Buffett since 1965, recorded $22.8 billion in profit, an increase of 26% from 2023.

The UBS analysts estimated that Berkshire's common equity portfolio grew by 7% in the third quarter, mostly thanks to an uptick in its stake in Apple, credit card firm American Express (NYSE:AXP) and food and beverage titan Coca-Cola (NYSE:KO). Berkshire is also tipped to roll out almost $1.9 billion in share buybacks during the quarter, the analysts said.