Longtime Berkshire Hathaway investor and analyst Chris Bloomstran came out with his detailed annual analysis of the company Wednesday, writing that the stock trades inexpensively relative to his estimate of instrinsic value and that the stock should be able to deliver 10% to 12% annual returns over the next decade.
Bloomstran, the chief investment officer at Semper Augustus Invest ments in St. Louis, titled the roughly 90-page report on Berkshiree "Going Out on Top," a reference to Warren Buffett's move to retire as CEO at year-end 2025.
There are only a handful of Wall Street analysts that cover Berkshire and it's rare to see the kind of deep-dive analysis that Bloomstran does every year. His work is followed by many Berkshire investors.
Bloomstran estimated that Berkshire's intrinsic value rose 9.3% to $1.1 trillion during 2025, or $855,396 per class A share and $570 per B share.
That estimate is about 13% above Berkshire's current stock price. The company's class A stock was up 1.5% Thursday to $753,376, possibly boosted by the bullish Bloomstran analysis.
Bloomstran uses several approaches to value Berkshire, including sum of the parts, adjusted GAAP financials (generally accepted accounting principles) and price/book value. He averaged those estimates to come up with his intrinsic value estimate.
Buffett says that Berkshire's intrinsic value is a key valuation metric but he doesn't disclose his estimate of that figure. Many investors view book value as an understated proxy for intrinsic value.
Bloomstran noted that Berkshire's stock price gained 11.3% annually over the 20 years ending in 2025 and that the growth in book value per share matched that annualized stock-price increase.
"I'd be very surprised if Berkshire compounds by less than 10% per annum, " over the next 10 years, Bloomstran wrote of the stock. His view is that Berkshire can consistently earn a 10% to 12% return on its equity largely due to ample operating profits and that the stock should track that book-value growth.
The stock now trades around 1.5 times its estimated year-end 2025 book value, in line with its average multiple in recent years. The price/book ratio peaked with Berkshire stock last May at about 1.8 times.
Bloomstran thinks Berkshire's new CEO Greg Abel will deploy Berkshire's current mountain of cash totaling over $350 billion and potentially be more aggressive on share repurchases than Buffett has been in recent years.
Berkshire is due to release Abel's inaugural shareholder letter on Saturday along with Berkshire's annual report and fourth-quarter earnings. Berkshire hasn't bought back stock since May 2024 and Bloomstran doesn't see any repurchases in the fourth quarter of 2025.
"It's likely that Berkshire under Greg Abel's leadership will commit a large portion of today's outsized cash reserves at materially higher returns than are presently being earned on U.S. Treasuries," Bloomstran wrote.
In his sum of the parts analysis, Bloomstran valued Berkshire's railroad business -- BNSF -- at $120 billion to $140 billion, unchanged from 2024 and the company's utility business, Berkshire Hathaway Energy, at $86 billion to $91 billion, also unchanged from 2024.
His increased valuation estimate for 2025 relative to 2024 was largely driven by Berkshire's investments.
Other notable observations from Bloomstran is that he believes that Kara Raiguel, the CEO of Berkshire's General Re insurance unit, is the likely successor to Ajit Jain, 74, who now heads all of Berkshire's insurance operations. There is ongoing speculation that Jain may retire in the next year or two.
He wrote that she "is in my opinion easily the likely lock to lead Berkshire's insurance operation when Ajit does step aside. She's 53 with a long horizon to continue Ajit's monumental contribution to Berkshire." Other candidates for the top insurance job include Joe Brandon, the former CEO of Alleghany, who has continued to head the insurer as a subsidiary of Berkshire following Berkshire's purchase of the company in 2022.
Bloomstran has pegged Berkshire's intrinsic value at above the stock price in recent years. The premium now is not as great as it was two years ago due to the rally in the shares since the end of 2023.
Bloomstran's estimate of intrinsic value is higher than two others on Wall Street. UBS analyst Brian Meredith estimates Berkshire's intrinsic value at around $767,000 per A share ($511 per B share) while KBW's Meyer Shields put out a sum of the parts estimate of around $700,000 per A share in October.
This shows that the calculation is subjective and reflects valuation estimates for the company's vast number of subsidiaries.
There is a lot in the Bloomstran analysis for Berkshire watchers who want to get a good grasp of the complex company amid the leadership transition.