JPMorgan initiated stock coverage on Billionaire Warren Buffett's holding company Berkshire Hathaway (BRK.A) on Thursday with an "Overweight" rating and a $315,000 price target.
JPMorgan analyst Sarah DeWitt contends that the firm maintains a significant structural advantage that will allow it to produce earnings and harness value "faster than overall equity markets over time."
She also anticipates Buffett remaining with the multinational conglomerate for at least another decade but argues that any selling pressure caused by his exit "would ultimately create a buying opportunity as the earnings of the underlying business remain strong."
Upon his eventual departure from the company, DeWitt offers Greg Abel, who heads Berkshire's utility business, as the most likely replacement as he would be a "strong allocator of capital."
Berkshire's valuation also remains attractive, DeWitt noted, adding that she sees a number of catalysts which could drive earnings higher, namely through its insurance unit. She also argues that its Burlington Northern railroad remains an attractive asset.
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