Due to GEICO's underwriting profit margin peaking, KBW downgraded Berkshire Hathaway (BRK.A.US) to "Underperform" compared to the market.

KBW downgraded Berkshire Hathaway Inc. (BRK.A.US) Class A stock rating from "in line with the market" to "underperform the market", citing reasons including GEICO underwriting profit margin peaking, short-term interest rate declines, and tariff-related pressures. On Monday, Berkshire Hathaway Class A and Class B stocks (BRK.B.US) each closed down 0.79% and 0.82%, respectively. Analyst Meyer Shields wrote in a report to clients, "We believe that in the next 12 months, GEICO's underwriting profit margin may have peaked, property catastrophe reinsurance rates are declining, short-term interest rates are lowering, the railroad business faces tariff pressures, and there is a risk of weakened alternative energy tax incentives, leading to underperformance of the company compared to the market." He lowered the target price for Berkshire Hathaway Class A stock from $740,000 to $700,000. KBW slightly raised the 2025 earnings per share (EPS) forecast for Berkshire Hathaway Class A stock from $31,725 to $31,750, while lowering the 2026/2027 EPS forecasts from $32,430/$34,430 to $31,750/$33,350. The reason for the downgrade is based on assumptions of reduced catastrophic losses in the company's property and casualty (P&C) segment in the third quarter of 2025, decreased insurance investment income, slower revenue growth in the railroad business, and reduced energy tax incentives.