Wall Street analysts leaving Berkshire Hathaway’s Greg Abel’s first annual meeting were broadly impressed with his direction of the business but puzzled by the company’s subdued pace of stock buybacks. Despite Berkshire’s cash reserves approaching $400 billion and stock buybacks resuming in early March, total stock buybacks in the first quarter totaled just $235 million, which was lower than expected given the discount between the stock price and Berkshire’s intrinsic value, analysts said. “We believe investors were expecting a more aggressive stance on share buybacks,” CFRA analyst Katherine Seifert said in a note. He maintained a hold rating on Berkshire. Abel reiterated Berkshire’s policy of buying back shares if they trade below their intrinsic value, but stopped short of committing to a set level of capital deployment. Resuming in March Berkshire resumed share buybacks in March for the first time since 2024. Among dozens of assets, the owner of Geico Insurance and Dairy Queen had already disclosed that it bought $226 million in stock on March 4, so this means it only bought a little more as the quarter ended. KBW analyst Meyer Shields said this was “somewhat disappointing,” but still praised Abel for doing a “very strong job” in conveying a detailed understanding of Berkshire’s diverse businesses. Mr. Shields noted that Abel’s candid discussion of margin pressures at BNSF Railway and management’s strategy at the shipping company gave him credibility. “We believe CEO Greg Abell has done a very strong job of understanding in detail the nuances of the broader business, including near-term challenges. We viewed Burlington Northern Santa Fe’s latest information on below-peer margins and its historical and planned responses as impressively candid and credible, as well as long-term opportunities,” Shields, who rates Berkshire as Underperform, said in a note. UBS analyst Brian Meredith reiterated his buy rating and said the meeting reinforced continuity in Berkshire’s culture and capital allocation after the legendary Warren Buffett stepped down as CEO, while also highlighting opportunities for improved performance. He pointed to technology initiatives at BNSF and other sectors, including AI implementation, as a potential revenue driver. “We believe Greg Abel performed well at his first annual general meeting as CEO and demonstrated a deep understanding of all of BRK’s key businesses and plans to drive operational excellence,” Meredith said. Artificial intelligence emerged as a central theme at the conference. Abel said Berkshire is already considering AI-driven tools to improve BNSF’s operations and spoke fluently about technologies such as large-scale language models, highlighting their potential to enhance the company’s existing business. He also noted that the surge in data center development is a major tailwind for Berkshire’s utility operations, and that rising power demand is creating significant growth opportunities for the company’s energy grid assets. “Our sense at this point is that Mr. Abel has been reluctant to discuss the company’s manufacturing, energy and utilities divisions, and less so the insurance business. However, he has weighed in on cyber risk, advocated limited use of AI, and emphasized the need for human judgment,” CFRA’s Seifert said.
