On Friday, UBS analyst Brian Meredith (NYSE:MDP) increased the price target for Berkshire Hathaway (NYSE:BRKa) stock (NYSE:BRK-A) to $803,444 from the previous target of $796,021, while maintaining a Buy rating on the shares. The adjustment comes as UBS incorporates the anticipated impact from the Los Angeles fires into their projections.
Meredith's analysis includes an updated catastrophe loss model for the year 2025, which now estimates $2.5 billion in losses, up from the $1.4 billion forecasted for 2024. This increase takes into account the significant insured losses from the Pacific Palisades and Eaton (NYSE:ETN) fires, which are estimated to reach $35 billion. According to Meredith, a substantial portion of these losses is expected to be covered by the reinsurance market.
Berkshire Hathaway's reinsurance division is projected to incur an insured loss of $1 billion, while the impact on its primary insurance operations is predicted to be more modest at $150 million. The analyst's outlook for Berkshire Hathaway also reflects a slight rise in the 2026 earnings per share (EPS) estimate, attributed to higher expected investment income as short-term interest rates are likely to remain elevated for an extended period.
The revised price target and sustained Buy rating indicate UBS's positive outlook on Berkshire Hathaway's stock performance, despite the anticipated increase in catastrophe-related losses. The company's diverse operations, including its insurance and reinsurance businesses, are key factors in UBS's analysis and expectations for future earnings growth.
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