Berkshire rises 2.9% as UBS lifts price target on buyback, portfolio gains

Berkshire Hathaway shares rose more than 2% on Tuesday after UBS raised its price target and cited expectations for large share repurchases.

"We modestly raised our second-quarter and full-year earnings estimates, reflecting higher earnings at BNSF and lower catastrophe losses," Brian Meredith, analyst at UBS, said.

Meredith increased his price target on Class A shares by 3% to $877,848 from $854,596, implying roughly 15% upside from current levels. He maintained a Buy rating. Class B shares rose 2.88% to $511.5, while Class A shares advanced 2.76% to $766,438.44. Berkshire trades at about 1.4 times estimated book value, near the low end of its historical range.

The stock has lagged the broader market this year, rising about 1% versus the S&P 500's 9% gain. Investor sentiment has been supported by Berkshire's $360 billion equity portfolio, with Apple and Coca-Cola both hitting record highs. The company also likely repurchased between $5 billion and $11 billion of stock during the second quarter, a signal Meredith described as "bullish."

Berkshire's Apple stake, its largest investment, is worth approximately $77 billion after the stock gained about 25% this year. Coca-Cola, up nearly 29% in 2026, is valued at more than $35 billion. The company's Bank of America holding, exceeding $30 billion, also reached a 52-week high on Monday.

Meredith estimates Berkshire's intrinsic value at nearly $800,000 per Class A share, about 5% above the current trading price. His revised earnings forecasts for Class B shares rose 1.3% to $21.05 for 2026 and 0.8% to $21.32 for 2027.

Beyond its investment portfolio, Berkshire completed its $4.1 billion acquisition of Taylor Morrison in the second quarter, expanding its homebuilding business and making it the nation's fourth-largest homebuilder. The deal was the first major transaction under Chief Executive Officer Greg Abel.

The buyback activity and portfolio gains signal management's confidence in Berkshire's intrinsic value. Investors will watch the company's second-quarter earnings report, expected within the next two weeks, for updated operating earnings and capital allocation details.

This article is for informational purposes only and does not constitute investment advice.