Berkshire Hathaway stock hits record high as operating profit surpasses $10 billion

Berkshire Hathaway stock hits record high as operating profit surpasses $10 billion

Berkshire Hathaway’s Stock Price Reaches Record High as Quarterly Profit Surpasses $10 Billion

Berkshire Hathaway Stock Price

Aug 7, 2023

Berkshire Hathaway1, the conglomerate managed by the legendary Warren Buffett, saw its stock price soar to a record high, surpassing the $544,000 mark achieved in March 2022. The stock climbed more than 2% in response to the company’s quarterly operating profit, which exceeded $10 billion for the first time2.

In the second quarter, Berkshire Hathaway benefited from rising interest rates and generated impressive profits from fixed-income investments. Its cash stake grew to a staggering $147.4 billion, while Geico, the auto insurance company owned by Berkshire, incurred fewer accident claims, bolstering its profitability3. However, the BNSF railroad suffered a decline in profit, and other businesses such as Clayton Homes, Forest River, and Duracell also reported lower earnings4.

In addition to the operating profit, Berkshire Hathaway posted a net income of $35.9 billion for the second quarter, mainly driven by unrealized gains on its investments, including Apple. The tech giant’s stock price rose by 17.6% during the quarter, contributing significantly to Berkshire’s impressive financial performance5.

Analyst Perspectives and Future Outlook

Analysts are enthusiastic about Berkshire Hathaway’s prospects, with UBS analyst Brian Meredith labeling the stock “an attractive play in an uncertain macro environment.” He raised the 12-month price target for the company’s Class A shares to $621,591, emphasizing the confidence in its long-term growth6. Keefe, Bruyette & Woods analyst Meyer Shields, who rates Berkshire Hathaway as “market perform,” also raised his price target to $565,000.

It’s worth noting that Berkshire’s Class B shares generally trade at around 1/1,500th of the price of its Class A shares. While they may no longer outperform the S&P 500 as consistently as in the past, Berkshire’s shares have historically tracked or slightly outperformed the index with lower volatility over long periods7. In 2023, they have modestly trailed the index after outpacing it in 20228.

The Berkshire Hathaway Empire

At the helm of Berkshire Hathaway for nearly six decades, Warren Buffett has built a conglomerate worth nearly $800 billion9. Berkshire’s empire spans various industries, including energy, car dealerships, real estate brokerages, manufacturing, and industrial businesses, as well as renowned consumer brands like Dairy Queen, Fruit of the Loom, and See’s Candies10.

Buffett’s investment prowess and ability to identify long-term opportunities have cemented his status as one of the most successful investors in history. Despite his advanced age of 92, Buffett continues to guide Berkshire Hathaway with his signature value-oriented and patient approach11.

As the company’s stock price reaches new heights and its underlying businesses show resilience, the future looks promising for Berkshire Hathaway and its shareholders. With an enviable track record and a diversified portfolio, the conglomerate remains a force to be reckoned with in the world of finance and investing12.

  1. Source – Reuters↩︎

  2. Source – Reuters↩︎

  3. Source – Reuters↩︎

  4. Source – Reuters↩︎

  5. Source – Reuters↩︎

  6. Source – Reuters↩︎

  7. Source – Reuters↩︎

  8. Source – Reuters↩︎

  9. Source – Reuters↩︎

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  11. Source – Reuters↩︎

  12. Source – Reuters↩︎