11:03 AM EDT, 05/05/2025 (MT Newswires) -- Berkshire Hathaway's ( BRK/A ) (BRK.A, BRK.B) shares were falling on Monday after Warren Buffett announced over the weekend that he would step down as chief executive of the conglomerate.

Greg Abel, currently vice chairman of non-insurance operations at Berkshire, will succeed the 94-year-old billionaire as CEO, effective Jan. 1, 2026, the company said Monday. Buffett will continue to serve as the board chairman.

Berkshire's class A and B shares were down more than 5% each intraday Monday.

"The time has arrived where Greg should become the chief executive officer of the company at year-end," Buffett told shareholders on Saturday. "I would still hang around and conceivably be useful in a few cases."

The announcement's timing was "somewhat of a surprise," but the transition to Abel was not, according to a UBS Securities note on Monday.

"We think we could see some near-term pressure on the shares on the announcement, particularly given the elevated valuation," UBS analysts, including Brian Meredith, said. "That said, we continue to believe (Berkshire) represents an attractive holding in the current uncertain macro economic environment."

UBS has a buy recommendation on Berkshire with a $606 price target.

"Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows," Meredith said. "Operationally, we expect little change at (Berkshire)."

Berkshire's investments include holdings in Coca-Cola (KO), Apple (AAPL) and China's BYD. Abel previously served on the boards of Kraft Heinz (KHC), AEGIS Insurance Services and AEGIS London, according to information available on the website of Berkshire Hathaway Energy, a Berkshire unit which Abel chairs.

On Saturday, Berkshire reported first-quarter earnings of $3,200 per average equivalent class A share, down from $8,825 a year earlier. Revenue slipped to $89.73 billion from $89.87 billion a year earlier. Three analysts polled by FactSet expected $90.83 billion.

Berkshire's operating income missed UBS' estimates due to weaker-than-expected insurance investment income, lower equity in earnings from affiliates and softer results in manufacturing, service and retailing, according to the research note.