By Jonathan Stempel
Berkshire Hathaway's stock price set a record high on Monday, rising more than 2%, after the conglomerate run by billionaire investor Warren Buffett said quarterly operating profit topped $10 billion for the first time.
In morning trading, Berkshire's stock price rose $14,300, or 2.7%, to $547,900, surpassing the previous high $544,000 set on March 28, 2022.
Rising interest rates helped Omaha, Nebraska-based Berkshire in the second quarter generate more profit from fixed-income investments, including a cash stake that grew to $147.4 billion, while fewer accident claims bolstered Geico car insurance.
That helped offset declining profit at the BNSF railroad, and lower earnings from building products companies such as Clayton Homes as well as consumer businesses such as Forest River recreational vehicles and Duracell batteries.
Buffett's company also posted second-quarter net income of $35.9 billion, reflecting unrealized gains on investments such as Apple, whose stock price rose 17.6% in the quarter.
Berkshire owned $177.6 billion of the iPhone maker's shares at the end of June.
UBS analyst Brian Meredith, who rates Berkshire "buy," raised his 12-month price target for the Class A shares to $621,591 from $608,000, calling the stock "an attractive play in an uncertain macro environment."
Keefe, Bruyette & Woods analyst Meyer Shields, who rates Berkshire "market perform," raised his price target to $565,000 from $545,000.
Berkshire's Class B shares normally trade at about 1/1,500th of the Class A share price.
The shares no longer routinely trounce the Standard & Poor's 500 as they did when Berkshire was smaller, but over long periods can track or slightly outperform the index with less volatility.
In 2023, Berkshire shares have slightly trailed the index, after outpacing it in 2022.
Buffett, 92, has run Berkshire since 1965.
His nearly $800 billion conglomerate also includes namesake energy, car dealership and real estate brokerage businesses, several manufacturing and industrial businesses, and consumer brands such as Dairy Queen, Fruit of the Loom and See's Candies.
(Reporting by Jonathan Stempel in New York; Additional reporting by Chuck Mikolajczak, Lance Tupper and David Gregorio)