Berkshire Hathaway, Inc. is a publicly owned investment manager. Through its subsidiaries, the firm primarily engages in the insurance and reinsurance of property and casualty risks business. Berkshire Hathaway was founded in 1889 and is based in Omaha, Nebraska.
BRK.B Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Berkshire Hathaway Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Berkshire Hathaway Inc ranked in the 50th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 56.5% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for BRK.B, they are:
As a business, BRK.B is generating more cash flow than 98.23% of positive cash flow stocks in the Financial Services.
Berkshire Hathaway Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 18.37% of tickers in our DCF set.
BRK.B's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 18.37% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as BRK.B, try CNA, CBOE, AJG, MKL, and JHG.