Berkshire Hathaway gains as insurance lifts first-quarter profit and cash nears $200 billion

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107410267 1714758980434 untitled 170 597

Warren Buffett and Martin the Geico gecko were pictured together ahead of the Berkshire Hathaway Annual Shareholder’s Meeting in Omaha, Nebraska on May 3rd, 2024. Berkshire Hathaway shares increased in premarket trading after the company reported a surge in operating earnings and a record cash hoard. Class A shares were up by 1.5% in the premarket, while Class B shares gained about 1.2%.

The conglomerate posted first-quarter operating profit of $11.22 billion, a 39% increase from the previous year, largely driven by higher insurance underwriting earnings. The strength in the insurance businesses, especially Geico, reflects the sector’s stronger demand and increased pricing power.

Berkshire’s cash reserves hit a record of $188.99 billion in the first quarter due to the company’s struggle to find suitable acquisition targets in recent years. Warren Buffett mentioned improved earnings in insurance underwriting and increased investment income at the annual shareholder meeting.

Despite already outperforming this year, Berkshire Hathaway shares continue to garner positive outlook from Wall Street analysts. UBS analyst Brian Meredith has a buy rating with a price target of $734,820, citing the earnings beat and growth potential of Geico. Edward Jones’ analyst James Shanahan has a hold rating, viewing the current stock price as fairly valued but expects solid earnings from Berkshire’s diversified operating companies.

Warren Buffett’s conglomerate, Berkshire Hathaway, reported a surge in operating earnings and a record cash hoard in the first quarter of 2024. The company’s Class A shares rose by 1.5% in premarket trading, while Class B shares gained about 1.2%. The increase in operating profit was primarily driven by a rise in insurance underwriting earnings, with Geico contributing significantly to the strong performance in this sector. Berkshire’s cash hoard reached a record $188.99 billion in the first quarter, up from $167.6 billion in the previous quarter, as the company struggled to find acquisition targets. Buffett attributed the improved earnings to higher investment income due to increased yields from short-term investments that are responsive to changes in interest rates. Despite already outperforming this year, Wall Street analysts remain positive on Berkshire’s outlook, with UBS analyst Brian Meredith giving a buy rating and raising the price target to $734,820, while Edward Jones’ analyst James Shanahan has a hold rating, noting that the stock price is already fairly priced but expects solid earnings from the company’s diverse group of operating companies. Geico is on track to catch up with competitors Progressive and others in data analytics by 2025, further boosting Berkshire’s prospects.

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