Barclays Reviews Berkshire Hathaway's Annual Meeting

In a report published Monday, Barclays analysts maintained an Overweight rating on Berkshire Hathaway Inc. BRK, while raising the price target from $170 to $173, following the company's annual meeting.

In the report Barclays noted the key takeaways from the meeting as:

1. “Warren Buffett is open to a $40+bn cash acquisition although it has no interest in buying a large commercial P&C insurer now that it is building its own presence."
2. Berkshire is unlikely to be designated as a SIFI by the Fed
3. The reinsurance market has declined and the entry of alternative capital will probably adversely impact the market over the next ten years
4. Significant bolt-on-acquisition opportunities have emerged for the company’s energy and auto dealership businesses.

The company reported its 1Q15 operating EPS ahead of the Barclays estimate, with the beat being driven by robust earnings growth across all non-insurance segments except Berkshire Hathaway Energy.

"Linked-quarter book value per B share increased +0.5% to $97.98 which was mostly in line with our estimate reflecting unrealized investment as well as FX losses," the analysts said.

Berkshire has "favorable leverage" to economic expansion, since its non-insurance business accounts for 70 percent of the company's operating earnings. "Overall, Berkshire should benefit from earnings growth in the Manufacturing, Service, and Retail unit, and Berkshire Hathaway Energy. Insurance earnings should be mostly stable and generate substantial free cash flow," the analysts wrote.

The EPS estimates for 2015 and 2016 have been raised from $7.70 to $7.95 and from $8.35 to $8.50, respectively.