UBS Lowers Berkshire Hathaway Price Target 2.5% to $591 Amid Buffett’s Defensive Shift

UBS has adjusted its price target for Berkshire Hathaway, reflecting Warren Buffett’s strategic shift towards a more defensive portfolio. The investment bank has lowered its 12-month price target for Berkshire Hathaway Class B shares from $606 to $591. This revision is in line with Buffett’s increasingly conservative investment approach, which prioritizes liquidity and risk mitigation in the face of volatile market conditions. Despite the downward adjustment, UBS analyst Brian Meredith maintains a Buy rating for Berkshire Hathaway, citing the company’s strong balance sheet and diversified portfolio as key strengths that support long-term value.

Berkshire Hathaway now holds over $305 billion in short-term U.S. Treasuries, a significant increase from the previous quarter. This sizeable cash position underscores Buffett’s preference for liquidity and safety in an uncertain macroeconomic environment. Concurrently, Berkshire has reduced its exposure to the banking sector by fully divesting from Citigroup and significantly trimming stakes in Bank of America and Capital One. This shift away from financial institutions reflects Buffett’s cautious outlook amid ongoing economic uncertainties and regulatory challenges affecting the banking industry.

The current macroeconomic landscape remains uncertain, with mixed signals from inflation data, interest rate policies, and geopolitical tensions. In this context, Berkshire Hathaway’s portfolio—comprising recession-resistant businesses and substantial cash reserves—positions the conglomerate as a stable investment option. UBS highlights that Berkshire’s minimal exposure to tariffs and diversified operations provide additional insulation against external shocks. Buffett’s conservative stance, characterized by holding record liquidity and reducing risk assets, equips Berkshire with the flexibility to capitalize on future investment opportunities when market conditions improve.

For investors seeking stability amid market volatility, Berkshire Hathaway offers a compelling combination of downside protection and potential for long-term growth. The company’s vast liquidity provides a buffer against economic downturns, while its diversified holdings reduce sector-specific risks. UBS’s maintained Buy rating reflects confidence in Berkshire’s ability to navigate uncertain times without compromising its financial strength. Investors are encouraged to monitor Berkshire’s capital deployment strategies closely, as Buffett’s historically opportunistic investments could drive significant value creation when favorable conditions arise.

UBS’s revised price target for Berkshire Hathaway underscores a prudent recalibration in response to Warren Buffett’s defensive repositioning. By increasing cash reserves and reducing banking sector exposure, Berkshire is strategically enhancing its resilience amid a complex economic backdrop. While near-term growth may moderate, the company’s robust liquidity and diversified business model continue to offer investors a reliable foundation for long-term stability and potential upside. This measured approach exemplifies Buffett’s enduring commitment to capital preservation and disciplined investment management.