Barclays Maintains an 'Overweight' on Berkshire Hathaway (BRK-B); Buffett Deploys Some Excess Cash; Invests $5bn in BAC

Barclays maintains an 'Overweight' on Berkshire Hathaway Inc. (NYSE: BRK-B) price target of $85.00.

Barclays analyst says, "Berkshire Hathaway invested $5bn in Bank of America (NYSE: BAC) preferred shares with a 6% coupon plus 700mn of attached warrants of BAC common stock with a 10-year exercise period. Warren Buffett's investment in BAC mirrors his investments in Swiss Re, Goldman Sachs (NYSE: GS), and General Electric (NYSE: GE) (although these were done at a 10% coupon) during the 2008 financial crisis. Berkshire should generate $300mn of additional pre-tax investment income, which will help offset investment income lost as a result of prior investments being redeemed."

"No change currently to our Berkshire EPS estimates based on the potential for significant insured damage from Hurricane Irene, which could also impact personal lines & commercial insurers as well as reinsurers. Near term, the insurance broker stocks likely benefit since demand for coverage could increase."

(NOTE - Barclays upgraded Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) to Overweight on August 9th)

For more ratings news on Berkshire Hathaway Inc. click here and for the rating history of Berkshire Hathaway Inc. click here.

Shares of Berkshire Hathaway Inc. closed at $68.99 yesterday.

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