Berkshire Hathaway (BRK-a) PT Raised at UBS Despite Miss; Insurance Disappoints, but BNSF Improves

November 7, 2016 7:13 AM EST
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Price: $238,100.05 -0%

Rating Summary:
    3 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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UBS analyst Brian Meredith reiterated a Buy rating and lifted his price target on Berkshire Hathaway (NYSE: BRK-a) to $247,500.00 (from $245,500.00) despite operating EPS of $2,951, which was below UBSe of $3,215 and consensus $3,058. The analyst noted Weak Insurance results but sequential improvement.

Meredith commented, "The unfavorable variance from our estimate was driven primarily by lower than expected pre-tax earnings from the Insurance group ($271 p/sh), which had lower than expected underwriting income at both Berkshire Hathaway Reinsurance Group and GEICO, and lower investment income. These headwinds were partially offset by better than expected results in Manufacturing, Service, Retailing ($114 p/sh) and BHE ($38 p/sh). BVPS of $163,783 (UBSe $163,538) was up 2.4% q/q and float grew 5% y/y to $91bn. Cash on the balance sheet rose to $68.3bn."

He added, "Higher weather related losses and lower favorable prior year reserve development were the principal reasons for the y/y decline in Insurance earnings. Additionally, GEICO's results were impacted by a rise in claims severity, similar to other personal auto insurers in the quarter. Growth in premiums at GEICO continued to improve. While BNSF continues to face headwinds in its coal and petroleum products, both revenues and earnings improved sequentially for the first time since 3Q15, perhaps indicting an improving environment. The MSR segment benefited from the inclusion of PCP and Duracell with a 200 basis point increase in pre-tax margins versus 3Q15."

For an analyst ratings summary and ratings history on Berkshire Hathaway click here. For more ratings news on Berkshire Hathaway click here.

Shares of Berkshire Hathaway closed at $214545.00 yesterday.

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