Berkshire's Buyback Spree Meets a Softer Insurance Engine

Berkshire Hathaway's capital return machine kept humming in the third quarter of 2026, but the conglomerate's insurance arm hit turbulence. Higher advertising spending at Geico weighed on results, and underwriting profits across the insurance and reinsurance operations slid 43% to $1.35 billion, according to a media report published Saturday.

The weakness in underwriting sits alongside numbers Berkshire had already disclosed. Operating profit for the quarter came in at $12.7 billion, down from $13.5 billion a year earlier — a decline Reuters put at roughly 6%, with the company itself reporting 5.8%. Net income attributable to shareholders fell to $22.1 billion from $30.8 billion, a 28% drop on Reuters' calculation.

A Silver Lining for the Analysts

Keefe, Bruyette & Woods found enough in the quarter to lift its price target on Berkshire's A-shares to $765,000 from $735,000 — even while keeping its "Underperform" rating, a stance that signals the firm still expects the stock to lag the broader market. Operating earnings per share of $8,907 in Q3 2026 topped the analysts' forecast of $8,869, and share repurchases came in larger than the firm had anticipated.

Those buybacks were substantial. Berkshire repurchased $9.6 billion of its own stock in the third quarter, then added roughly $2 billion more in October, according to company figures. Across the first nine months of 2026, the repurchase total reached about $14.4 billion.

Why Investors Are Circling

The stock's recent rally and its resilience have drawn attention. Reuters attributed the relative interest in Berkshire to a rotation out of technology names highly sensitive to the artificial intelligence theme, with investors turning toward the conglomerate as a perceived safe harbor. That shift has been reinforced by Berkshire's balance-sheet strength, its broad diversification, and the accelerated buyback program, the report noted.

Not everything in the quarter cooperated. Insurance results declined, and several retail businesses saw sluggish demand. Management pointed to uncertainty, tariffs, and wars as headwinds. On the reinsurance side, premium volumes in property and casualty benefited from the arrangement with Tokio Marine — one of the few bright spots in an otherwise softer insurance picture.

The A-shares were down 1.0% on the day the higher target was announced, a reminder that even an improved price objective comes with a cautious rating attached.