Berkshire Hathaway shares rally after UBS boosts price targets

Shares of Warren Buffett’s Berkshire Hathaway Inc. rallied Thursday, after UBS raised its price targets to among the highest on Wall Street, citing expected “significant” benefits from tax-reform legislation. Analyst Brian Meredith raised is target on the Class B shares to $244 from $213 and on the Class A shares to $366,000 from $319,000. Those are both above the highest targets among analysts surveyed by FactSet of $238 for the Class B shares and $356,821 for Class A shares. Meredith said he expects the stocks’ to continue to outperform the broader stock market, as he believes there is potential upside to earnings expectations as the company could deploy a “meaningful” amount of its more than $100 billion in cash, which should grow faster with a lower tax rate, on shareholder friendly measures. He said fundamentals in Berkshire’s non-insurance businesses remain solid and the reinsurance and commercial insurance operations are improving. “We view Berkshire as a significant beneficiary of tax reform with lower tax rates alone driving a 16% increase in our earnings estimates,” Meredith wrote in a note to clients. The more-active Class B shares rose 1% in afternoon trade. They have soared 32.4% over the past 12 months, while the S&P 500 has climbed 24.2%.

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