Key Morningstar Metrics for Berkshire Hathaway
- Fair Value Estimate: USD 765,000
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: Narrow
- Morningstar Uncertainty Rating: Low
What We Thought of Berkshire Hathaway’s Earnings
Narrow-moat-rated Berkshire Hathaway BRK.A reported adjusted third-quarter operating results that were basically in line with our expectations, with the firm continuing to benefit from solid results from its insurance businesses even as other parts of the company falter.
Why it matters: Berkshire has historically offset underperformance in one or more of its segments with outperformance in others, with the firm’s insurance operations doing the heavy lifting the past several years.
- Following a period of outstanding results, the insurance operations have normalized some in 2025 as smaller price increases and higher catastrophe losses (primarily in the first quarter) have impacted underwriting results.
- BNSF continues to underperform Union Pacific, though, despite seeing another improvement in its operating ratio in the third quarter.
- Berkshire Hathaway Energy, meanwhile, saw a slight decline in third-quarter results and continues to signal that future results may be impacted by recent legislation aimed at curbing investments in renewables.
- The manufacturing, service, and retailing division posted a slightly better quarter on the top line, with profitability improving year over year.
- The company also ended September 2025 with a record USD 358 billion in cash and equivalents, up from USD 344 billion at the end of the second quarter and USD 321 billion at the end of last year.
The bottom line: With Berkshire’s third-quarter operating results being in line with our expectations, we expect to keep our recently revised USD 765,000 (USD 510) per Class A (B) share fair value in place and view the shares as slightly to modestly undervalued.
- Excluding the impact of investment gains/losses and other adjustments, third-quarter adjusted operating revenue increased 2.1% year over year to USD 95.0 billion.
- Adjusted operating earnings increased 33.6% year over year to USD 13.5 billion, as solid insurance results were augmented by solid results across most of the firm’s operations.
- Book value per share, which serves as a decent proxy for measuring changes in Berkshire’s intrinsic value, increased 10.9% year over year to USD 485,429 from USD 437,580 at the end of September 2024.
