Berkshire Hathaway's Class B shares remained close to the $500 level during Wednesday's session, showing minimal movement even as broader market indices edged lower. UBS analysts maintained a positive view on the conglomerate's defensive characteristics in the post-Buffett era but expressed skepticism about the scope for significant share repurchases at current valuations.
Capital Deployment in Focus
With Warren Buffett having transitioned the CEO role to Greg Abel at the start of 2026, investor attention is firmly fixed on the company's strategy for allocating its massive cash reserves. UBS pointed out that Berkshire's cash and equivalents stand at approximately $378 billion, representing about 35% of its total market capitalization. The firm's analysis suggests the stock is trading merely 1% below its estimated intrinsic value, a historically narrow gap that has not prompted aggressive buyback activity.
The analysts reiterated a Buy rating with a price target of $508.12. They noted that while the slim discount to intrinsic value may limit buybacks, the substantial cash hoard leaves the door open for a major acquisition. Operational improvements at subsidiaries like BNSF Railway and Berkshire Hathaway Energy were cited as positive levers, though competitive pressures led to a trimmed outlook for the GEICO insurance unit.
Abel's Leadership Under Scrutiny
Market participants are keenly observing for any shift in strategic direction under the new leadership. Some analysts speculate that Greg Abel may adopt a more hands-on management style compared to his predecessor. The upcoming 2026 shareholder meeting on May 2 is anticipated as a key event where Abel may outline his capital allocation plans and broader vision for the company.
Without a clear path for deploying its enormous cash pile—whether through large-scale buybacks, a transformative deal, or other means—some observers caution that Berkshire risks being perceived as a cash-heavy index tracker, potentially testing investor patience. A spike in market volatility could, however, present more attractive entry points for the company to put its capital to work.
In early trading, Berkshire's Class B shares were essentially flat at $500.01, while the Class A shares traded around $753,540. The S&P 500 ETF (SPY) declined 0.2%.
