Why the Berkshire shares have given in since the general meeting

• Berkshire Hathaway general meeting in early May
• Warren Buffett announces withdrawal at the end of the year
• Investors draw “buffet surcharge”

At the beginning of May, the annual general meeting of the investment holding company Berkshire Hathaway from Starinvestor Warren Buffett took place. In the course of this, the recent quarterly results were presented, as well as questions were answered and informed about further developments by the company. At the end of the much -noticed event, the stock market legend bumped a bomb: he announced that he wanted to hand over the management of his investment holding holding at the end of the year.

However, the announcement was not entirely without preparation, after all, Buffett had announced in the past that he had found a suitable successor in Greg Abel. Abel has been part of Berkshire since 1999 and has been responsible for business outside of insurance since 2018. If the Board of Directors agree, Abel will then be able to control Berkshires’ business after Buffett’s departure. However, the star investor does not want to withdraw completely, but still wants to be available to the company as a consultant. However, decisions should make Abel, as Buffett emphasized at the shareholder meeting.

Buffett looks back on a very long and successful career as an investment professional, in the course of which he became known for his value investing strategy, which he continues to pursue rigorously. Berkshire Hathaway itself – originally a small textile company – was converted into an investment company and thus celebrated great success over the decades.

Berkshire shares under pressure

This can also be seen from the performance of the Berkshire shares. The A-shares Berkshire Hathaways have existed since the 1960s. They have never been split and are among the most successful standard values ​​in the United States in the long run. As the German Press Agency writes, they would have gained an average of almost 20 percent in value between 1965 and at the end of 2024 annually. The course plan during this period is fabulous 5.5 million percent. From almost double-digit courses in the 1960s, it went up to $ 680,290 by the end of 2024.

Since the 1990s there have also been much cheaper stocks from the investment company. These B shares were originally conceived to simplify investors, to start with Berkshire. It was also made easier for heirs to transfer A papers into B titles. The B share also looks back on a success story. Shortly before this year’s general meeting at NYSE, she was able to mark a record high of $ 542.07.

However, the course has been clearly down since the general meeting. The price of $ 539.80 has recently reduced to $ 491.13, which corresponds to a minus of 9.02 percent (the final course of June 10, 2025). The situation is similar with the much less frequent A-share: here it went from $ 809,350 immediately before the general meeting to more $ 736,000.

Melting the “buffet surcharge”

In the decline, analysts see a melting of the so-called “buffet surcharge”, as Barron’s writes. The foreseeable departure of the stock market legend is also related in the estimates of the Wall Street experts. After the HV, UBS analyst Brian Meredith reduced his profit estimate for 2025 by 6 percent to $ 19.92 per B share. He justifies this step by assuming lower capital and dividend yields. On the other hand, the cash returns are likely to decrease, as it is expected that the US Federal Reserve Fed will reduce the key interest rates this year. Berkshire, on the other hand, sits on an enormous cashberg of around $ 347 billion, as was revealed as part of the balance sheet template. Although it is planned to use the funds for future investments, Buffett said during the general meeting that this does not happen tomorrow or “in five years”, as CNBC quoted.

UBS covers the course target together

At the same time, however, Meredith does not assume that this or next year there will be BERKSHIRE’s share buyback programs, since the Berkshire shares in his assessment would notify him about their intrinsic value, Barron’s resembles him. Nevertheless, the overall attitude of the UBS analyst compared to investment holding will remain positive: “We continue to believe that the BRK share is attractive in an insecure macroeconomic environment with USD 347 billion in cash and short-term systems, a defensive business mix and a manageable customs risk”. Therefore, the financial institution holds on its purchase recommendation for the B-share Berkshires, even if the price target from 606 has been reduced to more $ 591.

As Barron’s suspects, the pullback of the past few weeks could also be profit from investors who want to pay Buffett’s cash register before the Buffett’s departure. Because even if Buffett has always praised his successor Abel in the past in the highest tones, it is possible that investors want to take a look at his leadership style himself when he takes over the helm at Berkshire in 2026. Meanwhile, it remains to be seen how the new leadership will affect the Berkshire shares.

Editor finance.net

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