Core Viewpoint - Berkshire Hathaway is undergoing a significant leadership transition as Warren Buffett will step down as CEO at the end of 2025, with Greg Abel set to take over after Buffett's 60-year tenure [1] Group 1: Stock Performance - Berkshire Hathaway shares have underperformed the broader market in 2023, with a year-to-date increase of approximately 10%, compared to about 16% for the S&P 500 Index [2] Group 2: Valuation and Financial Position - Berkshire Hathaway stock is currently trading at about 16 times earnings, which is a modest premium to diversified financials but a significant discount to the peer group average of nearly 27 times [3] - A discounted cash flow analysis indicates that BRK.B is trading at approximately 35% below its intrinsic value [3] - Greg Abel will inherit a financial war chest of up to $380 billion, generating about $8.7 billion annually at current interest rates, allowing for aggressive capital deployment [4] Group 3: Business Operations and Future Outlook - The conglomerate's insurance operations continue to generate substantial underwriting float, reported at $176 billion in Q3 2025, providing a strong foundation for future growth [5] - Berkshire's diversified business model offers stability through economic cycles, with core units such as insurance, railroad, and energy generating consistent cash flows [6] - Technical indicators show that BRK.B stock is trading above key moving averages (50-day, 100-day, 200-day), suggesting continued bullish momentum [6] Group 4: Analyst Sentiment - Wall Street analysts are optimistic that Berkshire Hathaway stock will rise under Greg Abel's leadership in the coming year [7]
Berkshire Hathaway Is About to Have a New CEO. How Should You Play Its Stock for 2026?