Analysts were impressed with Greg Abel’s first annual meeting as Berkshire Hathaway’s CEO, but expressed disappointment with the limited share buybacks despite the company’s massive cash reserves. While Abel showcased a strong understanding of Berkshire’s diverse businesses and highlighted the potential of AI, investors are hoping for a more aggressive capital deployment strategy.
Berkshire's Abel Impresses, But Analysts Seek More Aggressive Buybacks
Wall Street analysts emerged from Greg Abel's first annual meeting as CEO of Berkshire Hathaway broadly impressed with his grasp of the business, yet underwhelmed by the company's cautious approach to share buybacks. Despite a substantial cash reserve nearing $400 billion and the resumption of buybacks in March, first-quarter repurchases totaled a modest $235 million – falling short of expectations given the perceived undervaluation of Berkshire's stock.
"We think investors were hoping for a more aggressive buyback stance," noted Catherine Seifert, analyst at CFRA, who maintains a hold rating on Berkshire. Abel reaffirmed Berkshire's policy of repurchasing shares when trading below intrinsic value but refrained from committing to a specific capital deployment level.
Berkshire resumed buybacks in March for the first time since 2024, purchasing $226 million on March 4, with only a small additional amount bought as the quarter concluded. KBW analyst Meyer Shields described this as "modestly disappointing," while still praising Abel for a "very strong job" in demonstrating a detailed understanding of Berkshire's diverse operations. Shields highlighted Abel's candid discussion of margin pressures at BNSF Railway and management's strategy at the shipping line as bolstering his credibility.
"We think CEO Greg Abel did a very strong job of communicating a detailed understanding of the nuances of many of the wide array of businesses, including near-term challenges…we viewed the updates on Burlington Northern Santa Fe's below-peer margins and its past and planned responses as impressively candid and hence credible," Shields wrote.
UBS analyst Brian Meredith reiterated a buy rating, emphasizing continuity in Berkshire's culture and capital allocation following Warren Buffett's departure. He pointed to technological initiatives, including AI adoption at BNSF and other units, as potential drivers of returns. "Greg Abel performed well in his first Annual Meeting as CEO, in our view, exhibiting a deep understanding of all of BRK's major businesses and plans to drive operational excellence," Meredith said.
Artificial intelligence emerged as a central theme, with Abel discussing Berkshire's exploration of AI-driven tools to improve operations at BNSF and the potential of large language models. He also highlighted the surge in data center development as a growth opportunity for Berkshire's utility operations.
Seifert noted that Abel appeared more comfortable discussing the manufacturing, energy, and utility sectors of the firm compared to the insurance businesses, but offered insights into cyber risk and the limited use of AI, stressing the importance of human judgment.
