JPMorgan isn’t buying that Ackman will soon create another Berkshire
JPMorgan isn’t convinced that Bill Ackman’s vision to transform real estate developer Howard Hughes Holdings into a “modern-day” Berkshire Hathaway will soon prove fruitful. The Wall Street investment bank downgraded its rating on Howard Hughes to neutral from overweight Monday after Ackman’s Pershing Square struck a deal in May to boost its holding to nearly 47% through a new investment of $900 million. “Pershing Square and Bill Ackman’s intention is to use the cash infusion into the company to make investments outside real estate (perhaps into insurance) and turn HHH into a diversified holding company,” JPMorgan analysts led by Anthony Paolone said. “As a result, we don’t think the thesis of strong real estate performance narrowing the [net asset value] gap and/or the company taking actions to narrow the NAV gap (i.e., buybacks, go-privates, asset sales, etc.) is as prevalent as it was prior.” Ackman intends to turn Howard Hughes from a real estate company with master-planned communities into a company with controlling stakes in other public and private businesses, much similar to Warren Buffett’s Berkshire. Ackman previously said it is “highly likely” that he will build or buy an insurance company for Howard Hughes, which would mirror the history of the Omaha-based conglomerate, which owns auto insurer Geico and other insurance and reinsurance businesses. HHH YTD mountain Howard Hughes shares in 2025. JPMorgan believes the direction of the stock will increasingly depend on the potential new investments Ackman makes for Howard Hughes, which creates an uncertain outlook. “The restructuring of the company and shift in control to Pershing Square and Bill Ackman changes the focus to being a diversified holding company,” JPMorgan said. “We think the stock and thesis will depend more on what these new investments are precisely.” As part of its call, the bank also lowered its year-end price target on Howard Hughes by more than 7%, to $76 per share from $82 per share. The new target is still 14% higher than Monday’s close at $66.75. Howard Hughes, based outside Houston, has fallen more than 13% so far in 2025, on track to decline for the third year in four.
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