Warren Buffett’s Berkshire target cut at UBS on lower investment income

Investing.com — UBS has trimmed its 12-month price target for Berkshire Hathaway’s Class A shares by about 2%, citing “modestly lower EPS estimates due principally to a lower investment income forecast.”

The new target is $887,099, down from $909,218. UBS also lowered its target for Berkshire’s Class B shares to $591 from $606.

The downward revision is said to reflect reduced expectations for dividend income and lower yields on cash, leading analysts to cut 2025 earnings per share estimates to $29,882 from $31,789.

The 2026 estimate was also lowered slightly to $32,972 from $33,355.

UBS further noted that it “removed share repurchases for the remainder of 2025 and 2026 given where BRK’s shares are trading relative to intrinsic value.”

As of the first quarter, Berkshire had not repurchased any shares, with UBS estimating the stock is trading at a 9% premium to intrinsic value, well above the roughly 15% average discount since buybacks resumed in 2018.

Still, UBS maintains a Buy rating on Berkshire shares, citing the firm’s resilience.

“We continue to believe BRK’s shares are attractive in an uncertain macro environment with $347bn of cash & ST investments, a defensive business mix, and manageable tariff exposure.”

One area of optimism is GEICO, Berkshire’s auto insurance unit, which UBS sees as poised for a rebound.

“We now expect GEICO’s combined ratio to return to target levels of mid to high 90’s, by 2027,” the firm wrote. UBS also expects GEICO to begin gaining market share again this year after years of decline, contributing to stronger insurance earnings and float.

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