Berkshire Hathaway: Buffett’s Retirement Does Not Alter Our Outlook for the Company’s Future

Key Morningstar Metrics for Berkshire Hathaway

• Fair Value Estimate: $765,000
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Low

Berkshire Stock Update

With Warren Buffett retiring as CEO at the end of 2025, Berkshire Hathaway BRK.A/BRK.B enters a new era with Greg Abel taking the helm at the conglomerate.

Why it matters: For the past 61 years, Warren Buffett steered the ship at Berkshire, generating annualized growth in book value per share, as well as the company’s stock price, which exceeded the return of the S&P 500 TR Index.

• Replacing Buffett will be a tall task for Greg Abel, who we believe will be held to a completely different standard than Buffett—judged by both his performance as an operator (something that Buffett was never really interested in doing) and as an investor (something that Abel has little track record of doing) as the company’s new CEO.
• With the changeover now complete, we think it will serve investors to focus more on what Berkshire will look like now that Abel, who is truly an operations manager and is likely to do some things much differently than Buffett, has taken the helm.

The bottom line: We expect to keep our $765,000 ($510) per Class A (B) share fair value estimates, which have always been based on the fundamentals of the company’s operations, in place. We view the shares as slightly undervalued right now.

Key stats: Although Berkshire has had a stellar run of results under Buffett’s leadership, returns have been more pedestrian during the past decade.

• Book value per share, which is a good proxy for measuring changes in Berkshire’s intrinsic value, increased at an estimated 18.2% CAGR during 1965-2025, compared with a 10.5% annualized return for the S&P 500 TR Index. That said, during the past decade Berkshire’s annualized growth in its book value per share of 12.5% trailed the 14.8% CAGR posted by the index.
• While Berkshire’s stock generated an annualized return of 19.8% during 1965-2025, compared with a 10.5% CAGR for the S&P 500 TR Index, its share price performance of 14.3% per year on average during the past decade was slightly behind the 14.8% CAGR posted by the index.