JPMorgan Starts Berkshire Hathaway (BRK-A) at Overweight
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JPMorgan initiates coverage on Berkshire Hathaway (NYSE: BRK-A) with a Overweight rating and a price target of $315,000.00.
Analyst Sarah DeWitt believes the company's largest business possesses a meaningful structural advantage that enables it to generate earnings and capture value "faster than overall equity markets over time." The analyst expects Warren Buffett to remain in charge for another decade and believes any selling pressure generated from a Buffett departure "would ultimately create a buying opportunity as the earnings of the underlying business remain strong."
DeWitt says the valuation of the business remains attractive at 1.5x BV. Potential catalysts to accelerate earnings may come from the insurance business (through GEICO and Berkshire Hathaway Reinsurance) and also from the Burlington Northern railroad assets.
As for speculating on who could replace Buffett, DeWitt comments that Greg Abel who runs the utility business would appear to be the most likely candidate giving the likelihood he would be a "strong allocator of capital."
Shares of Berkshire Hathaway closed at $268450.00 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Hot New Coverage, New Coverage
Related EntitiesWarren Buffett, JPMorgan, Earnings
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