Advertisement
New Zealand markets close in 23 minutes
  • NZX 50

    11,785.36
    +57.35 (+0.49%)
     
  • NZD/USD

    0.6073
    -0.0012 (-0.20%)
     
  • NZD/EUR

    0.5581
    -0.0011 (-0.20%)
     
  • ALL ORDS

    7,938.50
    +13.30 (+0.17%)
     
  • ASX 200

    7,685.80
    +10.00 (+0.13%)
     
  • OIL

    82.58
    -0.14 (-0.17%)
     
  • GOLD

    2,164.80
    +0.50 (+0.02%)
     
  • NASDAQ

    17,985.01
    +176.76 (+0.99%)
     
  • FTSE

    7,722.55
    -4.87 (-0.06%)
     
  • Dow Jones

    38,790.43
    +75.66 (+0.20%)
     
  • DAX

    17,932.68
    -3.97 (-0.02%)
     
  • Hang Seng

    16,603.19
    -133.93 (-0.80%)
     
  • NIKKEI 225

    39,596.29
    -144.15 (-0.36%)
     
  • NZD/JPY

    90.6780
    -0.0170 (-0.02%)
     

Call of the week: Barclays says Berkshire Hathaway is 'attractively valued'

Yahoo Finance’s call of the week is Barclay’s bullish comments on Berkshire Hathaway (BRK-A, BRK-B).

The bank wrote in a research note that it thinks the $411 billion company run by billionaire investor Warren Buffett is well positioned to benefit from an improving economy, thanks to its diversified portfolio which consists of non-insurance companies accounting for three-quarters of operating earnings.

But that’s not the only reason Barclays is bullish.

It also thinks the company will profit from “higher short-term interest rates and potential future accretive acquisitions,” which means that future deals are expected to immediately add to its bottom line.

ADVERTISEMENT

Barclays points out that Berkshire Hathaway’s cash on hand could spark deals down the road. It estimates Berkshire’s immediately deployable cash amounts to around $75 billion and thinks these deals will supplement organic growth. Barclays also projects that Berkshire will produce more than $20 billion of annual free cash flow.

Warren Buffett
Warren Buffett (Credit: Reuters)

Barclay’s call comes as the Oracle of Omaha’s stock has been gaining momentum over the past few months. Since October 1, the stock is up 15%, hitting an all-time high of $266,445 in March. Barclays thinks shares are ‘attractively valued,’ at 1.44x trailing book value.

Barclays has a price target of $295,500 on the stock. It’s the most bullish call on the Street and an 18% increase from the stock’s close on Thursday.

Berkshire Hathaway has a total of three buy ratings and three sell ratings on the stock, according to Bloomberg.

Yahoo Finance will host the exclusive live stream of Berkshire Hathaway’s shareholder meeting on May 6, 2017.