Keefe, Bruyette & Woods downgraded Berkshire Hathaway to underperform, warning that Warren Buffett’s succession risk and a slew of business-specific headwinds could weigh on the conglomerate’s earnings and share performance over the next year. The brokerage slashed its rating to the equivalent of sell from neutral, and cut its price target for Berkshire’s Class A shares to $700,000 from $740,000, implying a 5% downside from Friday’s close of $738,500. “Beyond our ongoing concerns surrounding macro uncertainty and Berkshire’s historically unique succession risk … we think the shares will underperform as earnings challenges emerge and/or persist,” analysts led by Meyer Shields wrote in a note to clients. KBW said the company’s core businesses — from auto insurer Geico to railroad Burlington Northern Santa Fe — are likely to face simultaneous pressures in the year ahead, reflecting a mix of cyclical and structural challenges across the conglomerate’s portfolio. The analysts pointed to softer insurance investment income, weaker railroad growth and shrinking energy tax credits as mounting headwinds for Berkshire’s sprawling operations. The Omaha-based conglomerate has underperformed the S & P 500 this year as the stock tumbled double digits from all-time highs after the 95-year-old Buffett in May announced he’s stepping down as CEO at the year-end after six legendary decades. The sell-off partially reflects the so-called Buffett premium, or the extra price investors are willing to pay because of the billionaire’s unmatched record and exceptional capital allocation skills. BRK.A YTD mountain Berkshire Hathaway year to date Berkshire’s succession uncertainty reflects “Warren Buffett’s likely unrivaled reputation and what we see as unfortunately inadequate disclosure that will probably deter investors once they can no longer rely on Mr. Buffett’s presence at Berkshire Hathaway,” KBW said in the note titled “Many Things Moving in the Wrong Direction.” Berkshire’s B shares are up 8.6%. in 2024 as of Friday, compared to the 15.5% year-to-date gain for the S & P 500. The stock is lagging the equity benchmark by 6.9 percentage points, marking the largest gap it’s been all year. Moving in the Wrong Direction? For the second quarter, Berkshire’s operating profit dipped 4% year over year to $11.16 billion, impacted by a decline in insurance underwriting. KBW expects insurance profitability to weaken further as Geico lowers personal auto rates and ramps up marketing spending in an effort to regain market share. Berkshire Hathaway Reinsurance Group is also facing a less favorable backdrop, the firm said. A mild hurricane season has weighed on property-catastrophe reinsurance pricing, a trend that could reduce both premium volumes and profitability in the coming quarters, KBW said. Investment income, a key earnings driver in recent years, is expected to soften as well. With short-term interest rates declining, returns on Berkshire’s massive cash and Treasury portfolio are likely to come under pressure, limiting a source of steady income that has bolstered recent results. Buffett’s cash hoard of $344.1 billion remained near a record high at the end of June. At the railroad division, Burlington Northern Santa Fe’s inflation-adjusted revenue has historically moved in tandem with U.S.–China trade activity. KBW cautioned that persistent tariff pressures and weaker trade flows could continue to constrain growth. Berkshire Hathaway Energy also may see its profitability erode as the “One Big Beautiful Bill Act” accelerates the phase-out of clean-energy tax credits, KBW said. The policy shift could diminish the returns of future renewable projects and weigh on the conglomerate’s long-term energy earnings, it said. The conglomerate is set to report third-quarter earnings Saturday morning.
Blog
-
Preview, schedule, and how to watch live
Athletes to watch at the 2025 ISU GP Skate Canada International
Malinin is the headline draw in the men’s singles, with the two-time world champion enjoying an unbeaten streak dating back to the 2023 Grand Prix de France.
The U.S. star won in…
Continue Reading
-
2025 FIFPRO World 11 finalists revealed – FIFPro
- 2025 FIFPRO World 11 finalists revealed FIFPro
- Fifpro World XI: What is the award and when are winners announced? BBC
- Lionel Messi, Cristiano Ronaldo and Luis Suarez, all in the same attack? The five best FIFPRO Men’s World 11s – ranked Goal.com
Continue Reading
-
Who is in the running for the 2025 FIFPRO Men’s World 11? Ousmane Dembele, Vitinha, Lamine Yamal & more! – FIFPro
- Who is in the running for the 2025 FIFPRO Men’s World 11? Ousmane Dembele, Vitinha, Lamine Yamal & more! FIFPro
- Fifpro World XI: What is the award and when are winners announced? BBC
- Lionel Messi, Cristiano Ronaldo and Luis Suarez, all in the…
Continue Reading
-
1 in 5 UTIs Can Be Linked to Poor Hygiene in The Kitchen : ScienceAlert
Raw meat goo makes prime real estate for microbes, and a new study suggests these luxuriously moist abodes are a significant source of hidden foodborne illnesses, including urinary tract infections (UTIs).
“Urinary tract infections have long…
Continue Reading
-
Qualcomm accelerates data center push with new AI chips launching next year
(Reuters) -Qualcomm on Monday unveiled two artificial intelligence chips for data centers, with commercial availability from next year, as it pushes to diversify beyond smartphones and expand into the fast-growing AI infrastructure market.
Shares of Qualcomm surged nearly 15% on the news.
The new chips, called AI200 and AI250, are designed for improved memory capacity and running AI applications, or inference, and will be available in 2026 and 2027, respectively.
Global investment in AI chips has soared as cloud providers, chipmakers and enterprises rush to build infrastructure capable of supporting complex, large language models, chatbots and other generative AI tools.
Nvidia chips, however, underpin much of the current AI boom.
Qualcomm, to strengthen its AI portfolio, agreed to buy Alphawave in June, which designs semiconductor tech for data centers, for about $2.4 billion.
In May, Qualcomm also said it would make custom data center central processing units that use technology from Nvidia to connect to the firm’s artificial intelligence chips.
Qualcomm said the new chips support common AI frameworks and tools, with advanced software support, and added they will lower the total cost of ownership for enterprises.
The San Diego-based company also unveiled accelerator cards and racks based on the new chips.
Earlier this month, peer Intel announced a new artificial intelligence chip called Crescent Island for the data center that it plans to launch next year.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Vijay Kishore)
Continue Reading
-
Awakening an interstellar wanderer: Surprising nickel detection in Comet 3I/ATLAS
Rohan Rahatgaonkar is a Ph.D. student at the Instituto de Astrofísica-Pontificia Universidad Católica de Chile.
Darryl Z. Seligman is an Assistant Professor of Physics and Astronomy at Michigan State University.
Continue Reading
-
Premiership Rugby talking points: Tommy Freeman, Marcus Smith & Adam Radwan
There was only one place to start last week and that is where we start again.
Noah Caluori’s five tries on his first Prem start brought an increased level of interest to his second start for Saracens on Friday against Northampton Saints.
The…
Continue Reading
-
What Apple TV’s subtle name change might signal in streaming
When you minus a plus, you could still be left with a positive. At least, that’s what a basic understanding of math points to, and what Apple might be going for.
The tech giant’s streaming service recently underwent a subtle rebrand, dropping…
Continue Reading
-
Progressive familial intrahepatic cholestasis type 5 due to a novel mutation in the NR1H4 gene | BMC Pediatrics
The loss of FXR function due to mutations in the NR1H4 gene, located on chromosome 12q23, causes severe cholestasis and liver damage, resulting in a very rare form of PFIC (PFIC type 5) [2, 13]. Only 14 cases have so far been reported in the…
Continue Reading