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Barclays Analyst Forecasts 9% Gain for Berkshire Hathaway Shares

Warren Buffett
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Warren Buffett

Before Berkshire Hathaway split its Class B shares earlier this year, paving the way for their addition to the benchmark S&P 500 stock index, there weren't a lot of Wall Street analysts following the stock. Both the Class A and Class B shares were too expensive, on a per share basis, for most investors.

Now Wall Street is paying more attention.

Today, Barclays Capital has started coverage of the Berkshire Bs with a rating of "equal weight." I expect several other firms will also start covering the stock in the months to come.

Analyst Jay Gelb has set his price targets about nine percent higher than Friday's closes. He sees the Class A shares rising to $132,000 (from Friday's $121,050) and the Class B shares hitting $88 (up from Friday's $80.49).

Gelb says Berkshire's operating earnings seem to be "stalled" amid weakness for insurers in general. He expects only slight gains this year and next.

He also worries that the "Buffett premium" in Berkshire's stock price won't survive Buffett's eventual departure as CEO, but he says Buffett "probably has enough time to set his succession plan in motion to minimize disruption."

Gelb says MidAmerican Energy Chairman David Sokol, seen by many as a leading candidate for the BRK CEO post, would do well in the job.

Current Berkshire stock prices:

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Class B:

Class A:

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