Raising Our Fair Value Estimate as Berkshire Hathaway Gets Closer to Buffett's Retirement

While Berkshire Hathaway's operating businesses have generally provided the firm with a narrow moat on a combined basis, it has been management's ability to produce additional excess returns from the cash flows thrown off by its disparate operations that historically pushed our moat rating into wide territory. However, a wide moat rating became increasingly harder to justify, not just because CEO Warren Buffett's departure will likely damp future investment returns, but because we continue to see slippage in some of the moat sources that support the economic moats in a few of its main operating businesses.