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Berkshire Hathaway

(BRK.B) - Get Report

"B" shares were touching

new 52-week highs on Monday after Stifel Nicolaus upgraded the stock to hold from sell.

In recent trading, the stock was up 2.3% at $86.83, topping the 52-week high of $86 as of Friday's close. Last week, the company reported higher-than-expected earnings, leading to the Stifel upgrade.

Lead analyst Meyer Shields said that all segments had matched or beat Stifel's operating income forecasts, with book value per share also surprisingly high due to unexpected derivatives gains.

As a result of Berkshire's unexpected outperformance, Shields lifted his earnings-per-share estimate for 2011 to $6,712 per share from $6,468 per share and for 2012 to $7,099 per share from $6,725 per share. Berkshire's stock is divided into two classes. Meyer's earnings estimates pertain to Berkshire's "A" shares, which represent the equivalent of 30 "B" shares.

However, the analyst didn't go so far as to recommend that investors purchase the stock.

"Economic recovery-driven earnings growth should offset declining underwriting results and lower reinvestment yields as borrowers repay crisis-era debts," said Shields. However, "Berkshire's shares have underperformed the S&P 500 index by roughly 21.7% since 6/30/2010, but we doubt further declines are likely given the broadening economic recovery. We are upgrading our rating on Berkshire's shares to Hold as our fair value estimate of $121,887 implies only 4.4% downside potential from current levels."

The Omaha, Neb.-based corporate giant, run by

Warren Buffett

, reported $7.4 billion worth of net earned premiums in its key insurance division last quarter, up nearly 12% from the year-ago period. It also saw improvement in its railroads, utilities and energy division, thanks to its purchase of Burlington Northern Santa Fe Railway last year, as well as its manufacturing, service and retailing business. Its finance segment saw lower revenue but higher margins, while the investments segment got a boost from $2.2 billion worth of derivatives gains.

-- Written by Lauren Tara LaCapra in New York


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