Morningstar Key Metrics for Berkshire Hathaway
- Fair value estimation: $765,000/$510
- Morningstar Rating: ★★
- Morningstar Economic Moat Rating: Narrow
- Morningstar Uncertainty Rating: Weak
What we thought about Berkshire Hathaway’s profits
Berkshire Hathaway Narrow Moat BRK.A BRK.B reported third-quarter adjusted operating results slightly above our expectations, as the company continues to benefit from strong underwriting results in its insurance business despite declining prices over the past year.
Why it’s important: Berkshire has historically offset underperformance in one or more of its segments with outperformance in others.
- After several years of exceptional results, the insurance business saw its rates fall over the past year, but with no catastrophe-related losses discernible in the third quarter, underwriting results remained strong.
- BNSF continues to lag behind Union Pacific in profitability, despite further improvement in its operating ratio, with the profitability gap between the two companies at just over 400 basis points on a preliminary basis in the third quarter.
- Berkshire Hathaway Energy, meanwhile, produced steady third-quarter results, but future results could still be affected by wildfire-related litigation and legislation that has dampened investments in renewable energy.
- The manufacturing, services and retail division posted a decent revenue gain during the third quarter, helped by the closing of the OxyChem acquisition earlier in the year, as well as the Taylor Morrison deal in July, with margins returning to more normal levels.
The bottom line: With Berkshire’s third-quarter results slightly better than our expectations, we will likely slightly increase our current fair value estimate of $765,000 for Class A shares and $510 for Class B shares.
- Even though we adjust our valuation upward, we still view the company’s shares as slightly overvalued, trading at a 12% premium to our current fair value estimate.
- Book value per share, a decent metric for measuring changes in Berkshire’s intrinsic value, increased 10.5% year over year to $536,590, up from $485,429 at the end of September 2025.
Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
The author(s) do not hold any shares in any securities mentioned in this article. Find out about Morningstar Editorial Policies.
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