Stock Analysis & Valuation Berkshire Hathaway Inc. (BRH.DE)

• Previous Close: €360,000.00
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	303174.00	-16
Intrinsic value (DCF)	286254.33	-20
Graham-Dodd Method	608385.90	69
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Berkshire Hathaway Inc. (BRH.DE) is a diversified multinational conglomerate headquartered in Omaha, Nebraska, with a strong presence in insurance, freight rail transportation, utilities, and various manufacturing and retail sectors. The company operates through its subsidiaries, offering a wide range of products and services, including property and casualty insurance, reinsurance, railroad systems, and energy generation from multiple sources. Berkshire Hathaway also has significant interests in manufacturing, retail, and logistics, making it a key player in multiple industries. With a market capitalization exceeding €548 billion, the company is a cornerstone of the financial services sector, known for its disciplined investment strategy under the leadership of Warren Buffett. Its diversified business model provides resilience against economic downturns, while its strong cash flow generation supports continued growth and strategic acquisitions.

Investment Summary

Berkshire Hathaway presents a compelling investment opportunity due to its diversified business model, strong cash flow generation, and disciplined capital allocation. The company's insurance and railroad segments provide stable revenue streams, while its utility and energy operations offer long-term growth potential. With a beta of 0.88, Berkshire Hathaway is less volatile than the broader market, making it an attractive option for risk-averse investors. However, the lack of dividend payouts may deter income-focused investors. The company's substantial cash reserves (€47.7 billion) and manageable debt levels (€124.8 billion) provide financial flexibility for future acquisitions and investments. Overall, Berkshire Hathaway remains a solid long-term investment, particularly for those seeking exposure to a diversified, well-managed conglomerate.

Competitive Analysis

Berkshire Hathaway's competitive advantage lies in its diversified portfolio, strong brand recognition, and disciplined investment approach. The company's insurance subsidiaries, including GEICO and Berkshire Hathaway Reinsurance Group, benefit from underwriting discipline and a strong capital base, allowing them to compete effectively in the insurance market. Its BNSF Railway subsidiary is a critical player in North American freight transportation, with a vast network that competitors struggle to replicate. In the utilities sector, Berkshire Hathaway Energy operates a diversified mix of energy sources, providing stability and regulatory advantages. The company's manufacturing and retail segments benefit from strong brand loyalty and operational efficiency. Unlike many competitors, Berkshire Hathaway's decentralized management structure allows subsidiaries to operate independently while benefiting from the parent company's financial strength. This unique model provides resilience against sector-specific downturns and enables long-term value creation.

Major Competitors

• Chubb Limited (CB.US): Chubb is a global leader in property and casualty insurance, with a strong presence in commercial and specialty lines. While it lacks Berkshire Hathaway's diversification, Chubb excels in underwriting discipline and international reach. Its smaller scale limits its ability to compete with Berkshire's reinsurance operations.
• UnitedHealth Group Incorporated (UNH.US): UnitedHealth is a dominant player in health insurance and healthcare services. Unlike Berkshire Hathaway, it focuses primarily on healthcare, offering a more concentrated but high-growth business model. Its Optum segment provides integrated health services, a niche Berkshire does not directly compete in.
• Johnson & Johnson (JNJ.US): Johnson & Johnson operates in pharmaceuticals, medical devices, and consumer health, overlapping slightly with Berkshire's manufacturing interests. While J&J has strong R&D capabilities, it lacks Berkshire's diversified revenue streams and financial services exposure.
• Union Pacific Corporation (UNP.US): Union Pacific is a major competitor to Berkshire's BNSF Railway, operating a similar North American rail network. While UNP has comparable scale, it lacks the financial backing and diversification of Berkshire, making it more vulnerable to economic cycles.
• NextEra Energy, Inc. (NEE.US): NextEra Energy is a leader in renewable energy, competing with Berkshire Hathaway Energy in utilities. NEE has a stronger focus on renewables but lacks Berkshire's diversified business model and insurance cash flows to fund growth.