UBS Sees 15% Upside for Berkshire Hathaway, Citing Apple and Coca-Cola as Key Drivers

Barron's reported that Berkshire Hathaway (BRK.B-US) shares rose 2.4% on Tuesday (28th), driven by record highs in key holdings Apple (AAPL-US) and Coca-Cola (KO-US), which boosted the value of Berkshire's stock investment portfolio. Despite underperforming the broader market year-to-date, investors see potential for further gains.

Berkshire's Class B shares closed at $512.37, and Class A shares at $768,010. Despite the day's strong performance, both share classes have risen only about 1% year-to-date, significantly lagging the S&P 500's total return of approximately 9% including dividends.

UBS analyst Brian Meredith raised his price target for Berkshire's Class A shares by about 3% from $854,596 to $877,848 on Tuesday, maintaining a 'Buy' rating. The new target implies about 15% upside from the current share price.

Meredith estimates Berkshire's intrinsic value per Class A share at nearly $800,000, about 5% above the current market price. He also slightly raised his second-quarter and full-year earnings forecasts for the company.

UBS increased its 2026 EPS forecast for Berkshire's Class B shares by 1.3% to $21.05 and the 2027 forecast by 0.8% to $21.32, citing slightly higher expected profits at BNSF Railway in Q2 and reduced catastrophe losses in its property and casualty insurance operations.

Barron's estimates that Berkshire's per-share book value for Class A shares is currently around $535,000, up from an estimated $522,000 at the end of Q2. Based on the current share price, Berkshire trades at about 1.4 times its book value.

This price-to-book ratio is at the lower end of its recent range and below the peak of about 1.8 times reached in May 2025, when Berkshire's Class A shares briefly approached $810,000 per share.

Berkshire is expected to release its second-quarter financial results within the next two weeks, which will reveal updated shareholder equity figures.

Berkshire's nearly $400 billion cash position could enhance its appeal as a defensive holding amid pressure on tech stocks. The SPDR Technology ETF fell another 2% on Tuesday, while Berkshire's stock price has often moved inversely to tech stocks this year.

Based on regulatory filings from Berkshire Chairman Buffett, the company may have repurchased approximately $8.5 billion of its own stock in Q2, potentially one of the largest single-quarter buybacks in its history.

Barron's previously estimated that Berkshire's actual Q2 buyback could range between $5 billion and $11 billion. Meredith views this potential buyback as a 'bullish signal.'

Berkshire has a market capitalization of about $1.1 trillion, with operations spanning railroads, insurance, energy, and manufacturing. Due to its massive scale and diversified operations, there are few directly comparable companies in the market.

However, some publicly traded companies related to Berkshire's businesses have seen significantly higher stock gains this year. Union Pacific Railroad (UNP-US), a comparable to BNSF, has seen its stock rise 30% this year; CSX (CSX-US), another railroad operator, has gained over 50%.

Berkshire holds the world's largest property and casualty insurance capital base, with insurance operations including auto insurer Geico and reinsurer General Re. In contrast, insurers such as Chubb (CB-US) and Everest Group (EG-US) have seen their stocks rise about 15% to 20% this year.

Apple and Coca-Cola shares hit new highs

Berkshire's stock investment portfolio has performed strongly this quarter and year-to-date, led by its top holdings Apple and Coca-Cola, both of which hit new highs on Tuesday.

Apple's stock approached $340 on Tuesday, up about 25% year-to-date. Following strong Q2 earnings, Coca-Cola's stock surged about 6% on the day to around $89, with a year-to-date gain of nearly 29%.

Data shows Berkshire's stock portfolio is valued at nearly $360 billion, with Apple holdings worth about $77 billion and Coca-Cola holdings exceeding $35 billion.

Another major Berkshire investment, Bank of America (BAC-US), hit a 52-week high on Monday and is up about 10% year-to-date. Berkshire's stake in BofA is worth over $30 billion.