Berkshire Hathaway Stock (BRK.B) Slides into a Correction as ‘Buffett Premium’ Fades

The stock of Berkshire Hathaway (BRK.B) has fallen into a correction, defined as a drop of 10% or more from recent highs, as the Warren Buffett premium fades.

BRK.B stock hit a record high on May 2 of this year, which was the day before the company’s annual meeting in Omaha, Nebraska. It was at that meeting that Buffett, age 94, announced that he will step down as CEO of Berkshire Hathaway at the end of 2025 after leading the holding company for 60 years. Buffett will remain on Berkshire’s board of directors.

Since Buffett announced his retirement as CEO, handing the reigns to his handpicked successor Geg Abel, Berkshire Hathaway’s stock has drifted lower and now fallen 10% from its record high reached six weeks ago. The decline in BRK.B stock comes despite assurances from Buffett that he plans to still be in the Berkshire Hathaway office every day.

Many people invested in Berkshire Hathaway’s stock because they believed in Buffett and his business and investing acumen.

Buy the Dip?

How low BRK.B stock goes remains to be seen. But some analysts say the correction is likely to end soon as the shares are now more reasonably valued at 1.6 times their book value. Also, Berkshire’s stock could be getting low enough for Berkshire Hathaway to resume its share repurchases. The company hasn’t bought back any stock since May 2024 because the share price had been steadily rising.

Buffett himself oversees the buyback program and only repurchases shares when they are trading below what he views as their intrinsic value. The current selloff in BRK.B stock has occurred while the S&P 500 index has risen 6% since May 2, marking a rare time in which Berkshire’s shares have corrected in a rising market.

Many investors are waiting to see what new CEO Abel does with Berkshire’s cash pile of more than $300 billion. BRK.B stock is still up 8% on the year.

Is BRK.B Stock a Buy?

Berkshire Hathaway’s Class B stock has a consensus Moderate Buy rating among three Wall Street analysts. That rating is based on two Buy and one Hold recommendations assigned in the last three months. The average BRK.B price target of $536.50 implies 8.85% upside from current levels.

Read more analyst ratings on BRK.B stock