Analyst Sees 20% Upside in Berkshire Hathaway and Warren Buffett

Berkshire Hathaway Inc. (NYSE: BRK-B) rarely gets analyst research calls from Wall St. research and independent research shops. When it does, many investors tend to pick apart the data hoping to find one more tidbit of data that they did not know about Warren Buffett and one of the greatest growth stories of the 20th century. The call is right on the heels of Warren Buffett telling the board that he has finished his prostate cancer treatment.

This morning came a call out of Zacks Investment Research naming Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) as the “Bull of the Day,” with the research firm indicating that it was raising its recommendation to Outperform from Neutral. The move is said to be on the heels of second-quarter earnings with strength seen on all fronts. The company talks up the insurance and finance operations, rail trends, utilities and energy, retail and services, and even manufacturing efforts.

Zacks also talked up the balance sheet with a growing book value. It did note one caution on the unknown succession plan for CEO and Chairman Warren Buffett. Zacks talked up the expectations from financial operations, as well and said that the earnings fluctuations from unrealized gains and losses in derivatives are mostly unrealized and not as relevant.

The report calls for 20% upside to a six-month target price of $106.00 per share, which comes to 18.7-times the 2012 earnings expectation. estimate for 2012.

FULL BERKSHIRE HATHAWAY REPORT

There is at least one thing to note regardless of what today’s research report sees in upside. Berkshire Hathaway managed to do the same thing that General Electric Co. (NYSE: GE) did just last week, and that is hitting a new multiyear high in the share price. We noted last week that BofA also raised GE’s rating to Buy with a $25 target right as it was hitting multiyear highs. The Berkshire Hathaway B-shares are down two cents at $88.50, and the 52-week trading range is $65.35 to $89.23 in the stock price.

JON C. OGG