Buffett's Berkshire Hathaway Sells 401K DaVita Shares Two Days Before Q3 Earnings Decline

Warren Buffett's Berkshire Hathaway offloaded 401,514 shares of healthcare company DaVita (NYSE: DVA) at $135.35 (£102.56) per share, worth approximately $54.3 million (£41.1 million). This sale occurred just two days before DaVita's stock tumbled following its lower Q3 earnings.

According to the latest filing with the Securities and Exchange Commission (SEC), Berkshire Hathaway sold the shares on 27th October. The stock subsequently dropped to around $126 (£95.47) during Thursday's premarket hours, after DaVita reported a decline in adjusted earnings for Q3.

On 29th October, DaVita announced that its adjusted earnings per share (EPS) fell to $2.51 (£1.90) from $2.59 (£1.96) a year earlier. The quarterly figure also declined sequentially from $2.95 (£2.24) in Q2 and missed Zacks Research's consensus estimate of $3.29 (£2.49). Despite the earnings dip, revenue increased slightly to $3.42 billion (£2.59 billion), up from $3.26 billion (£2.47 billion) in Q3 2024.

Berkshire Hathaway has been steadily reducing its holdings in DaVita throughout 2025. Since the start of the year, Buffett's conglomerate has offloaded an estimated 4.34 million shares. The stock has fallen 15.3% so far this year, lagging behind the S&P 500's 17.1% gain.

Factors Impacting Q3 Financial Results

DaVita's Q3 performance was affected by several operational headwinds. In Q2, the company suffered a cybersecurity incident that disrupted its systems, leading to significant recovery costs. Restoring affected systems cost approximately $11.7 million (£8.8 million) during Q3.

Additionally, the firm reported $1 million (£757,715) in patient care costs and around $24.2 million (£18.3 million) in general and administrative expenses for the nine months ending 30th September.

CEO Javier Rodriguez highlighted ongoing efforts to manage costs and invest in clinical innovation. However, he noted a decline in treatment volume—down approximately 1.5% year-over-year—which weighed on operational results.

'US treatment volume was down approximately 1.5% year-over-year,' Rodriguez stated. This decline, along with other factors, contributed to the company's subdued financial performance.

In Q3, DaVita also recorded investment losses of $51.3 million (£38.8 million) related to Mozarc Medical Holdings, which included impairment and restructuring costs of $25.9 million (£19.6 million).

Looking ahead, DaVita has narrowed its full-year 2025 EPS guidance to between $10.35 and $11.15 (£7.84 to £8.45), down from an earlier range of $10.20 to $11.30 (£7.73 to £8.56).

Analyst and Market Sentiment

In mid-October, Truist Securities reduced its 12-month price target for DaVita from $148 (£112) to $140 (£106) per share, maintaining a 'Hold' rating. The firm noted that, despite short-term headwinds, the healthcare sector remains promising due to consistent demand.

Polls conducted by TipRanks show four analysts with a 'Hold' rating, and one with a 'Sell'. The average target price among analysts is $144 (£109), with the lowest at $137 (£103).

Looking ahead, analysts forecast revenue growth of just 3.1% over the next year, indicating potential demand challenges for DaVita's services in the near term.

Berkshire Hathaway's Broader Outlook

Berkshire Hathaway's stock has also experienced declines this week after Keefe, Bruyette & Woods (KBW) downgraded its Class A shares to 'Underperform' from 'Neutral'. The downgrade reflects concerns over broader business headwinds and the approaching retirement of Warren Buffett, who is expected to step down by the end of this year.

KBW also cut its price target for Berkshire Hathaway's Class A stock to $700,000 (£526,036) from $740,000 (£556,095).

Berkshire Hathaway's recent sale of DaVita shares ahead of its earnings decline raises questions about the company's outlook. While the firm faces operational challenges—including cybersecurity issues and declining treatment volumes—analysts remain cautiously optimistic about the sector's long-term demand.

However, with Berkshire Hathaway's confidence waning and broader market headwinds, investors should approach with caution. As always, conducting thorough research and seeking professional advice remain essential before making investment decisions.

Disclaimer: Our content is for informational purposes only and does not constitute investment advice. Please conduct your own analysis or consult a financial advisor. Investments are subject to market risks, and past performance does not guarantee future results.