Analyst Downgrades Berkshire Hathaway to Rare 'Sell' Recommendation

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Warren Buffett

Warren Buffett's Berkshire Hathaway has been downgraded to 'sell' by Stifel Nicolaus analyst Meyer Shields and his team.

Shields previously had a 'hold' recommendation on the stock.

In a note for clients, Shields says a "blah-shaped" economic recovery has not been priced into Berkshire's stock price. "Our weak macroeconomic outlook implies poor 2H10 earnings" for the company's operating companies."

There's also a "doubly whammy" for Berkshire. Shields says a weaker economy will hurt Berkshire's holdings and derivatives contracts. "Investors' focus on Berkshire's book value for valuation imply that its shares could outpace broader market's declines."

Shields discussed his call in a live appearance on CNBC's Fast Money Halftime Reporttoday.

In addition, he notes that Berkshire has been outperforming the S&P 500 stock index this year, gaining 20 percent versus the benchmark's drop of five percent. He thinks that relationship is "nearing an apex that seems poised for a correction based on the shares' history."

Over the years, Berkshire's high-priced shares have limited the number of analysts covering the stock. That's beginning to change now that the B-shares split has brought their price tag down to double-digits, clearing the way for Berkshire's addition to the S&P 500.

Before today's move by Stifel, our analyst scorecard showed one 'buy' and four 'hold' recommendations on Berkshire.

Current Berkshire stock prices:

Class B:

Class A:

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