Berkshire shares hit eight-month high

Berkshire Hathaway shares rallied to an eight-month high this week and there could be more gains ahead if they continue to catch up to the S&P 500.

The B shares closed Tuesday at $512.37, their highest level since November 28, when they finished at $513.81.

They closed today at $511.54. That's down 5.2% from the all-time closing high of $539.80 on May 2 of last year, the day before Warren Buffett revealed he would step down as CEO at the end 2025.

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The Class A shares ended Tuesday at $768,010. That's also their highest close since November 28's $770,100.

Today's close of $766,600 is 5.3% below their all-time closing high of $809,350.

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Barron's thinks Berkshire's rally "has room to run" since the stock remains "well behind" the benchmark S&P 500, which is 7.6 percentage points ahead.

But Berkshire has erased more than half of its 17.5 percentage point deficit just two months ago.

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Berkshire is also lagging behind competitors in two key sectors: railroads ...

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... and insurance.

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Another positive factor for Berkshire is the big gains for three of its biggest equity portfolio holdings.

Number one Apple, with a stake now worth more than $70 billion, is up 13.6% so far this year.

Coca-Cola, Berkshire's third largest position at $35 billion, has jumped 25% year-to-date. Its earnings this week came in ahead of expectations and it raised its full-year outlook.

Number four Bank of America is up 12.6% on the year. That stake is now valued at almost $32 billion.

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Berkshire's gain of around 3% on Tuesday may have been partially fueled by UBS analyst Brian Meredith raising his price target on the B shares to $585 from $570, and on the A shares to $877,848 from $854,596.

While maintaining a "buy" rating, Meredith also edged his earnings forecasts higher and welcomed the Barron's report two weeks ago that Berkshire appears to have bought back up to $11 billion of its stock in the second quarter.

We'll get the actual number when Berkshire releases its results for the quarter, which we expect on Saturday, August 8."

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