Berkshire Stock Rally Has Room to Run. Apple and Coke Are Driving Portfolio Gains. -- Barrons.com
Dow Jones2026/07/28 17:01By Andrew Bary
Berkshire Hathaway stock was up over 2% Tuesday as investors appeared to be recognizing that the conglomerate's equity portfolio is doing well, led by Apple and Coca-Cola, and that Berkshire had been lagging shares of comparable companies this year.
Berkshire's Class B shares were trading at $509.20, up 2.4% on the session, while the A stock was also 2.4% higher at $763,370.
There could be more gains ahead for Berkshire stock since both the A and B are up only 1% this year, well behind the S&P 500 this year with the index returning about 9% in 2026.
Berkshire also is badly lagging such stocks as Union Pacific, which competes against Berkshire's BNSF rail unit, and Chubb, a leader in property and casualty insurance, where Berkshire is a major operator.
UBS analyst Brian Meredith Tuesday lifted his price target on the A shares by 3% to $877,848 from $854,596, while maintaining a Buy rating on the stock.
He slightly boosted his second-quarter and full-year earnings estimates as well. His price target is about 15% above the current stock price. He pegs Berkshire's intrinsic value at nearly $800,000 per class A share, about 5% above the current price.
Berkshire's valuation remains reasonable at about 1.4 times what Barron's estimates is the current book value of about $535,000 per class A share, up from our projection of about $522,000 at the end of the second quarter.
Berkshire's estimated current price/book ratio is toward the low end of the range in recent years and below a peak of 1.8 times in May 2025, when the A shares peaked at about $810,000 a share.
The company is due to report its second-quarter results in the next two weeks that will include its shareholder equity.
Other factors could be helping the stock Tuesday. Berkshire is the ultimate defensive play given its cash-rich balance sheet with nearly $400 billion in cash, and it may be benefiting as an "anti-tech" stock with State Street Technology Sector SPDR down another 2% Tuesday. The stock often has traded counter to the tech group this year.
UBS's Meredith lifted his 2026 and 2027 estimates for the Berkshire B shares by 1.3% and 0.8% to $21.05 and $21.32, respectively, citing "modestly higher earnings at BNSF and lower catastrophe losses" in the second quarter. The catastrophe loss comment refers to the company's big property and casualty insurance business.
Meredith said Berkshire's apparent purchase of about $8.5 billion of stock in the second quarter -- a development first reported in Barron's earlier this month based on an ownership filing by Chairman Warren Buffett -- is a "bullish sign." That would be one of its largest quarterly buybacks ever. Barron's estimated the second-quarter buybacks in a range of $5 billion to $11 billion based on the Buffett ownership filing.
Berkshire watchers recognize that there is no real comparable company given Berkshire's size at $1.1 trillion and diversified businesses, but some relevant companies and sectors are seeing much larger gains than Berkshire in the stock market.
Union Pacific stock -- the best comp for BNSF -- is up 30% this year, while railroad operator CSX has gained over 50%. Berkshire has the largest P&C insurance capital base in the world and operates such large insurers as auto specialist Geico and reinsurer Gen Re. Insurance stocks also have been strong, with a range of companies like Chubb and Everest Group up 15% to 20%.
Berkshire's equity portfolio is having a strong quarterly and year to date performance led by Apple (its largest holding) and Coca-Cola, both of which hit new highs Tuesday. Apple, at nearly $340, is up 25% this year, while Coke is up 6% Tuesday after a strong second-quarter earnings report and now is nearly 29% higher at $89.
CNBC's portfolio tracker puts the Berkshire equity portfolio at nearly $360 billion, with the Apple stake worth about $77 billion and Coke at more than $35 billion. Another large Berkshire investment, Bank of America, hit a 52-week high Monday and is up 10% this year. That stake is valued at over $30 billion.
Write to Andrew Bary at andrew.bary@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 28, 2026 13:01 ET (17:01 GMT)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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