As the broad markets (SPY) fell from their peaks in January 2018, analysts reviewed their price targets. They’re now expecting subdued returns from equities in 2018. Wall Street is expecting lower returns for asset managers amid rising rates, concerns over trade wars, and high valuations.
Among major conglomerates and managers (XLF), Berkshire Hathaway (BRK.B) has a next-12-month price target of $349,000, implying a potential rise of 19.0% from its current price. Three out of five analysts have given Berkshire “buy” ratings, and the remaining two have given it “hold” ratings. These ratings have remained fairly stable over the past few months. Analysts are preferring diversified conglomerates such as Berkshire over alternative or traditional asset managers, as we can see reflected in their valuations.
Among other conglomerates and insurers, analysts have assigned insurance giant AIG (AIG) a target price of $68.07, implying a potential rise of 27.7%. Of the 19 analysts covering AIG, ten have recommended “buys” or “strong buys,” seven have recommended “holds,” and the remaining two have recommended “underperform” or “sell” ratings on the stock in April 2018.
In the case of General Electric (GE), seven out of 17 analysts have given the stock “buy” or “strong buy” ratings in April 2018, six have given it “hold” ratings, and four have given it “underperform” or “sell” ratings. The stock’s price target has been revised downward to $17.78 with an implied upside of 37.9%.
Among other insurers, Chubb (CB) has a favorable rating, with 16 out of 19 analysts recommending “buys” or “strong buys” on its stock. The remaining three analysts are divided—one each for “hold,” “underperform,” and “sell.” The stock has a price target of $163.19, implying a potential upside of 21.6%.