Wall Street is making its expectations for Greg Abel clear as he gets ready to take over Berkshire Hathaway from Warren Buffett in less than two weeks from now.
The leadership change has already moved the stock, with Berkshire’s B shares dropping 15% after Warren announced at the May annual meeting that he would leave the CEO role at year-end, before trimming that slide to 8.4% by Friday’s close.
Wall Street urges Greg Abel to build confidence with ownership and tighter control
Yahoo Finance reported that Bill Stone, the CIO at Glenview Trust, said the most important thing Greg can do is “don’t try to be Warren Buffett.”
Bill called Warren and Charlie Munger the “greatest duo ever” in investing and added that “trying to beat them at their game…is probably not the right thing.”
Bill also said Greg should focus on boosting operating earnings, cutting outstanding shares, and being ready to act when opportunities appear.
Meanwhile, Jonathan Boyar, president of Boyar Research, said on Thursday that the best way for Greg to win Wall Street’s trust is to “buy an extremely large amount of Berkshire stock personally and really put his money where his mouth is.”
Jonathan pointed to Berkshire’s 2025 proxy, which shows Greg already holds a stake valued at around $171 million, but he also said that “all of that was bought when, obviously, Buffett ran the company.
Jonathan also said Greg is expected to bring more oversight than Warren, who kept a hands-off structure across Berkshire’s subsidiaries. He said decentralization left room for changes, adding that “there’s probably a lot of fat to cut,” that some divisions could be consolidated, and that profitability could improve in ways Warren “just hasn’t wanted to do.
Jonathan said, “Buffett is the greatest capital allocator…and the greatest investor of all time…He’s not known as the best manager…Greg Abel might be able to do things that he couldn’t or wouldn’t do.”
Analysts outline expectations for Berkshire in the Greg Abel era
David Jagielski, Motley Fool’s top analyst, said Warren’s long run gave Berkshire “plenty of time to prepare for a successor” and that Greg is “well prepared” to take over.
In a client’s note this week, David wrote that Greg’s approach “won’t differ a lot” from Warren’s but noted that portfolio changes may still appear. He pointed to Berkshire’s new stake in Alphabet in the third quarter, saying it may have offered a “glimpse” of the company’s direction under Greg.
David added he is a little optimistic that Berkshire may put more focus on growth stocks and move away from slower holdings like Kraft Heinz. He expects Berkshire to be an “excellent buy” for next year and beyond and said any dip after Warren leaves would make the company “even more attractive.”
Mel Casey at FBB Capital Partners told Yahoo Finance that Berkshire’s range of businesses gives it an “all-weather quality,” making it feel like a lower-risk option compared to the rest of the market.
Mel said Berkshire looks “pretty reasonably valued” in a year with high valuations for U.S. large-cap stocks. Mel also warned about losing the “Buffett premium,” saying “there’s definitely a caution out there that some of the core investors are investors in Buffett rather than in the actual fundamentals of the company itself.”
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Source: https://www.cryptopolitan.com/greg-abel-shouldnt-try-to-be-warren/
