Warren Buffett's Berkshire Hathaway Sells Nearly $36 Million Worth Of Dialysis Giant DaVita's Shares Amid Q4 Earnings Beat

Warren Buffett's Berkshire Hathaway Inc. BRK BRK has cut its stake in the dialysis provide DaVita Inc. DVA according to a U.S. Securities Exchange Commission filing.

What Happened: According to the SEC filing, Buffett‘s Berkshire sold 203,091 shares of DaVita on Feb 11. Based on the stock's Thursday closing price, the transaction was valued at $35.96 million. Berkshire now owns about 35.892 million shares in the company representing a 45% stake abiding by its earlier share repurchase agreement.

According to Reuters, Berkshire has owned DaVita since the fourth quarter of 2011.

DaVita reported its full-year and fourth-quarter earnings after markets closed on Thursday. For the year ending Dec. 31, 2024, the company reported consolidated revenue of $12.8 billion, with $3.3 billion generated in the fourth quarter beating Benzinga Pro estimate of $3.27 billion.

Diluted earnings per share were $3.09 for the quarter and $10.73 for the year, while adjusted diluted earnings per share were $2.24, beating estimates of $2.14 for the quarter.

The company repurchased 2.3 million shares in the fourth quarter at an average price of $156.46 per share, and 9.8 million shares for the full year at an average price of $140.06 per share.

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Why It Matters: As previously reported in a Form 8-K filed on May 1, 2024, DaVita entered into a Share Repurchase Agreement with Berkshire, the company's largest stockholder, as of April 30, 2024.

Under the agreement, if Berkshire owns at least 45% of DaVita's stock, DaVita will buy back shares from Berkshire quarterly to maintain Berkshire’s ownership at 45%.

The 2024 filing stated that if Berkshire's ownership exceeds 49.5%, DaVita will repurchase shares immediately. Additionally, Berkshire agreed to vote any shares it owns above 40% according to DaVita's board recommendations.

This agreement does not change the existing Amended Standstill Agreement. Thus, DaVita repurchased its shares to bring back Berkshire’s holdings to 45% on Feb. 11, ahead of its on Feb. 13.

Price Action: DaVita shares gained 2.94% on Thursday, reaching $177.06 per share, but dropped 6.87% in after-hours trading as the company provided a weak outlook for 2025. DaVita projected a full-year EPS of $10.20 to $11.30, falling short of Wall Street's expectation of $11.44 per share.

The exchange-traded fund tracking the S&P 500 index, SPDR S&P 500 ETF Trust SPY rose 1.06% on Thursday. DVA has risen 18.18% year-to-date, whereas it gained 43.47% over the last year.

The average price target among nine analysts tracked by Benzinga is $138.33 with a ‘sell’ rating. The estimates range from $90 to $175 apiece. Recent ratings from Barclays, Truist Securities, and Truist Securities suggest a $168 target, implying a potential upside of 1.89%.

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