Analyst advised to buy Berkshire stock. Why is Buffett's departure not a threat to him?

Investment company Edward Jones advised to buy shares of Berkshire Hathaway, which is headed by legendary investor Warren Buffett. The analyst believes that the drawdown of the securities after the announcement of the billionaire's resignation from the post of CEO made them more attractive for long-term investors. Berkshire's strengths remain its diversified business, $350 billion in cash and leadership in the insurance sector, despite its recent weakening, Edward Jones believes.

James Shanahan, an analyst at investment firm Edward Jones, upgraded Berkshire Hathaway's stock from Hold to Buy, Barron's reports. Whether the analyst set a target price, Barron's and TipRanks did not specify. At the same time, Edward Jones included Berkshire's Class B shares in its "Focus List," Barron's added.

Shanahan believes the current value of Berkshire's securities could be "an attractive entry point for long-term investors." "Berkshire's revenue and earnings benefit from a diversified portfolio of operating companies," the analyst said in a statement from Barron's. - In addition, Berkshire has nearly $350 billion in cash on hand, which could be a strong earnings driver if the company begins to aggressively invest in businesses, individual stocks and/or buybacks of its own securities."

Shanahan noted that Berkshire shares weakened significantly after the announcement of Warren Buffett's departure from the post of CEO of the company at the end of 2025, which became known on Ma. 3. A day before the announcement, Berkshire's Class A shares were outperforming the S&P 500 by more than 20 p.p. But now, on the contrary, they are lagging behind by about 5 p.p. The analyst explained such a drawdown by the S&P 500. The analyst explained this drawdown by the fact that the company is perceived as a "safe haven" amid the rally of riskier securities, as well as the sagging insurance sector in recent months. Berkshire remains the largest player in this segment with the capital of about $300 billion, emphasizes Barron's.

But with the downturn, the company's value has become more reasonable, Barron's says. Berkshire's Class A shares now trade at a price-to-book value (P/B) ratio of 1.5, up from 1.8 at the peak on Ma. 2.

Five of the seven analysts tracking Warren Buffett's Warren Buffett securities have a Neutral with a Hold rating, according to MarketWatch. The remaining two are advising investors to buy them. Wall Street's consensus target price of $523.2 per Class B paper implies they are up another 8% from their Sept. 22 closing level.

At trading on Monday, the value of Berkshire securities almost unchanged: increased by 0.17%. Since the beginning of 2025, the securities have increased in price by almost 9%. For comparison: the main U.S. stock index S&P 500 for the same period added about 14%.

This article was AI-translated and verified by a human editor