Berkshire flirts with $1T valuation after earnings boost

investmentnews.com:

Berkshire Hathaway Inc. shares set another all-time high on Monday, pushing the market value of Warren Buffett’s conglomerate even closer to $1 trillion.

The Omaha, Nebraska-based company posted higher operating earnings, boosting a stock that’s been been crawling toward the trillion-dollar club since it notched a fresh record high last year. Surpassing that level would make Berkshire the first US company outside of the technology sector to reach such a market capitalization.

The shares gained as much as 3.1%, the biggest one-day jump since August, briefly boosting Berkshire’s market capitalization above $925 billion. The stock, which gained nearly 15% last year, was already up about 17% so far in 2024 through Friday.

“Extreme fiscal conservatism is a corporate pledge we make to those who have joined us in ownership of Berkshire,” Buffett wrote in his annual letter to shareholders. “Berkshire is built to last.”

The conglomerate reported fourth-quarter operating earnings of $8.48 billion on Saturday, versus $6.63 billion for the same period a year earlier, helped by an increase in insurance underwriting earnings and investment income amid higher interest rates and milder weather.

“Berkshire Hathaway’s earnings power should remain intact given its diverse units that can offset pockets of weakness — regardless of economic conditions,” Bloomberg Intelligence analyst Matthew Palazola wrote in a note.

Omaha-based Berkshire’s businesses range from insurance to railroads and ice cream, a stark contrast to the tech giants that currently levy such valuations. Its stock trades in two classes — the more heavily traded Class B that now goes for more than $400 per share, and its longer-standing Class A that changes hands above