No. of Recommendations: 2
Berkshire Hathaway’s earnings
should once again increase in 2024.
Operatingearnings,whichexcludecapital
gains and losses frominvestments, came
inat$4.68ashareduringtheSeptember
quarter, which was a moderate decline
fromthe strong year-ago tally. The pri
mary reason for the year-over-year profit
dropwasasharpdecreaseinunderwriting
income.Onpoint,underwritingincomede
clined from$2.4billion last year, to$750
million in 2024, as industrywide
catastrophesspikedreflectingseveralhur
ricanes that wreaked havoc in theU.S.
duringtheSeptemberperiod.Ontheother
hand, investment income trends were
strongfortheinterim, thankstoincreased
bondreinvestmentrates,whilemostofthe
company’sothersegmentsperformedwell.
Welookforresultstotakeastepback
nextyear, thoughthisrequiresanex
planation.All things considered, 2024 is
likely to be averygoodyear, whichwill
make for a difficult comparison in 2025.
We look for elevated catastrophes this
year toresult insolidprice increasesdur
ing 2025’s policy-renewal season, which
ought tomake foradecent earningsper
formancerelativetohistorical levels.
We forecast earnings tobenorthof
$23.00asharebythe2027to2029in
vestment horizon. Berkshire’s diver
sified status and immense size ought to
giveitaleguponthecompetition.
Thoughwe like theBerkshire story,
thesesharesdon’tstandout fromthe
crowdatpresent.Theyhavebeenstrong
performers thus far in 2024, increasing
nearly30%atthetimeofthisreview.That
ismore thanfivepercentagepointsabove
theS&P500Indexover that time frame.
That being said, they are only neutrally
ranked for year-ahead relative price per
formance, while 18-month appreciation
potential isnothing towritehomeabout.
Our longer-term projections, however,
could prove conservative if the company
makesanacquisition.Growththroughex
ternalmeanshasbeenanintegralpartof
the company’s long-termgrowthstrategy,
andahealthybalance sheet continues to
make this practical moving forward. (Of
note:Acquisitionsaren’t includedinourfi
nancial presentationuntil they are com
pleted.)
AlanG.Hous
No. of Recommendations: 0
BERKSHIREHATH.‘B’NYSE-BRKB
472.20 p/e ratio 23.6
relative p/e ratio- 1.28
TIMELINESS 3 Lowered 11/3/23
SAFETY 1 New 6/18/10
TECHNICAL 3 Lowered 11/29/24
