Berkshire shares slip after hitting all-time high on big profit gain
Berkshire Hathaway shares slipped Monday, despite hitting an all-time high following strong earnings from Warren Buffett’s conglomerate over the weekend.
Berkshire’s Class A shares last fell by 2.2%. Earlier in the session, the stock reached an all-time intraday high of $647,039, according to FactSet data. The shares settled at $615,356.
Berkshire on Saturday posted fourth-quarter operating earnings of $8.481 billion, about 28% higher than the $6.625 billion from the year-ago period, driven by big gains in its insurance business. Operating earnings refers to profit from businesses across insurance, railroads and utilities.
Meanwhile, Berkshire’s cash levels also swelled to records. The conglomerate held $167.6 billion in cash in the fourth quarter, surpassing the $157.2 billion record the conglomerate held in the prior quarter.
But one analyst said he expects that the stock is fairly valued, saying any upside from the conglomerate’s rosy earnings outlook is already priced into the name.
“BRK shares have significantly outperformed financial services peers during 2023, supported by a relatively strong earnings outlook. We continue to expect solid earnings from BRK’s diverse group of operating companies,” Edward Jones’ James Shanahan wrote Saturday. “In our view, however, the current share price reflects these positives.”
‘With our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital,” Buffett said. “Anything beyond ‘slightly better,’ though, is wishful thinking.”
Buffett added that only a handful of businesses are likely to “truly move the needle” for the firm through acquisitions. The last major deal Berkshire made was in 2022, when it bought insurer and conglomerate Alleghany for $11.6 billion.
