Skip to Content
Stock Analyst Update

Berkshire Shows Stronger Positioning; We Raise FVE

Here is where our valuations stand with Berkshire's various segments.


We've increased our fair value estimate for wide-moat Berkshire Hathaway (BRK.B) to $440,000 ($293) per Class A (B) share from $380,000 ($253) after updating our valuation model to reflect changes in the firm's investment portfolio, as well as results from its operating subsidiaries, since our last update. We continue to use a sum-of-the-parts methodology to arrive at our fair value estimate. With Berkshire's book value per share expected to increase at a high-single-digit rate this year and next, our new fair value estimate is equivalent to 1.40 and 1.31 times our estimates for Berkshire's book value per share at the end of 2021 and 2022, respectively, compared with 1.43 (1.41) times trailing calendar year-end book value per share the past five (10) years.

Looking more closely at Berkshire's operating segments, our valuation for the insurance operations increased to $188,100 per Class A share (up from $156,900 previously) due to improved performance of the equity portfolio and better expectations for earned premium growth (of 8.3% annually during 2021-25) and underwriting profitability (expected to average 99.6% annually). As for BNSF, our fair value estimate for the railroad business is $77,400 per Class A share (up from $72,100 previously) based on unit volumes increasing 2.6%, and freight revenues expanding 5.0%, annually on average during 2021-25, with the company's operating ratio falling below 62% by the end of 2025. Our fair value estimate for Berkshire's utilities and energy division also increased to $38,600 per Class A share (up from $36,000 previously) on continued constructive rate-case outcomes for each of the division's U.S. regulated utilities and the addition of Dominion GT&S to its pipeline operations. As for Berkshire's manufacturing, service, and retail division, we estimate it is worth $135,900 per Class A share (up from $115,000 previously), with revenue growing 3.8% on average, and pretax operating margins averaging 8.6%, annually during 2021-25.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Greggory Warren does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.