Wall Street Continues to Love Berkshire Hathaway amid Volatility

Operating performance

Berkshire Hathaway’s (BRK.B) diversified holdings and focus on manufacturing have allowed it to garner high growth in its core operating performance in 2018. Its investment portfolio has declined mainly due to market fluctuations. However, its valuations remain intact due to liquidity availability and new acquisitions in its pipeline.

Wall Street Continues to Love Berkshire Hathaway amid Volatility

Asset managers (XLF) could see weaker performances in their investment portfolio in the second quarter owing to weaker broad markets on valuation and rate hike risks. Berkshire has a next-12-month price target of $354,750, implying a 22.0% rise based on its current price. Of the eight analysts covering Berkshire Hathaway, five have recommended a “strong buy” or “buy,” and three have recommended a “hold.”

Industry and peer ratings

Among Berkshire’s insurance peers, ten of 19 analysts covering AIG (AIG) have recommended a “buy” or “strong buy,” seven have given it a “hold,” and the remaining two have given it “underperform” or “sell” ratings. Their target price for AIG is $62.80, implying a 16.0% rise.

Among conglomerates, General Electric (GE) has just seven “buy” or “strong buy” ratings out of 17 analysts covering the stock. Six have recommended a “hold,” and the remaining four have recommended an “underperform” or “sell.” Analysts have revised their target price for GE marginally upwards to $17.50, implying a 28.3% upside.

Among other insurers, Chubb (CB) has a favorable rating with 16 “buys” and “strong buys” out of 19 ratings. One analyst each has recommended a “hold,” “underperform,” or “sell” rating.