Executive Summary & Investment Thesis
Our **HOLD** rating on Berkshire Hathaway reflects our view that the company is currently trading at a price that fairly represents its immense intrinsic value. The core thesis remains unchanged: Berkshire is a premier vehicle for long-term capital preservation and compounding, built on a foundation of high-quality businesses and a fortress-like balance sheet. For existing long-term shareholders, we see every reason to continue holding this cornerstone asset. However, with the stock trading at an elevated price-to-book multiple, we see limited near-term upside, suggesting patience for new investors seeking a more attractive entry point.
12-Month Price Target
$493.00
Current Stock Price
$493.00
Price / Book Value
~1.72x
The investment strategy for Berkshire is, and always has been, one of long-term partnership. The value proposition is not about near-term price appreciation but about the steady, relentless compounding of book value over decades. While the current price reflects the market's high regard for Berkshire's quality and stability, we believe the best course of action for investors is to maintain their positions, allowing the underlying operating businesses and investment portfolio to continue generating value over the long haul.
The Compounding Machine
The ultimate measure of Berkshire's success is the long-term growth of its intrinsic value, for which book value per share serves as a useful proxy. The chart below visualizes this relentless, decades-long history of compounding, which is the core of the financial story. While quarterly results can be volatile due to accounting rules on investment gains/losses, the growth in operating earnings and book value tells the true tale of performance.
Growth in Book Value Per Share (A-Eqv.)
Key Financial Metrics (TTM)
Total Revenue$369 B
Operating Earnings$39.8 B
Insurance Float$169 B
Public Equity Portfolio$375 B
Cash & Equivalents$182 B
Total Assets$1.07 T
Book Value / B-Share~$286
Benchmarking Berkshire
Berkshire Hathaway has no direct competitor; it is a class of its own. It is more useful to benchmark its core attributes against other investment options, such as the S&P 500 index or a typical industrial conglomerate. The radar chart illustrates Berkshire's unique strengths, particularly in its balance sheet and insurance operations, which are unmatched.
Strategic Attribute Analysis
Investment Profile Comparison
| Entity |
Primary Strength |
Primary Weakness |
| Berkshire Hathaway | Financial Strength & Rationality | Large size ("law of large numbers") |
| S&P 500 Index Fund | Broad Diversification | Forced to own overvalued stocks |
| Typical Conglomerate | Operational Synergies | Often bureaucratic / inefficient |
| Private Equity Fund | Active Management | High fees, reliance on leverage |
Interactive Price-to-Book (P/B) Valuation
The most common way to value Berkshire Hathaway is by applying a multiple to its book value per share. Historically, the company has traded in a wide range, but a multiple of 1.3x to 1.8x is typical in the modern era. Use the slider below to set your own target P/B multiple and see the implied share price based on the current book value. This tool helps you understand how market sentiment (the multiple) drives the stock's price.
Implied Value Per Share
$493.00
This is a simplified model for illustrative purposes.
Valuation Summary: Fairly Valued at $493
Our $493 price target equates to a Price-to-Book multiple of approximately 1.72x our estimate of current book value. This is in the upper end of Berkshire's historical valuation range, suggesting that the market is fully appreciating the quality and defensive nature of its assets. While we don't foresee significant multiple expansion from this level, the continued growth of the underlying book value should provide returns roughly in line with the growth of the business itself, making it a solid holding for the long term.
Bear Case
$425
Market sentiment cools, P/B multiple contracts to a more average ~1.4x forward book value.
Base Case (HOLD)
$493
Our target: a ~1.63x multiple on forward book value of ~$303/share.
Bull Case
$560
A major "flight to quality" pushes the P/B multiple to a premium ~1.85x.