Berkshire Hathaway
An insurance company that invests the premiums its customers pay, and uses the money to own a railroad, power companies and dozens of other businesses outright.
The scores
Growth2/4 →
Revenue was $364.5B in 2023 and $371.4B in 2025; 2026's rise comes mostly from OxyChem, Taylor Morrison and fuel surcharges, not new demand.
Business quality4/4 →
One of two western US railroads, utilities with exclusive territories, and insurers that beat the industry's combined ratio by about 8 points over five years.
Financial position4/4 →
Cash and Treasury bills of $359.2B against $20.4B of parent debt; the railroad's and utilities' $85.3B is not guaranteed by Berkshire.
Execution record3/4 →
The decades of delivery were Buffett's. Abel has run the company for nine months, too short a record to earn the top score.
Per share capture4/4 →
The share count fell 0.45% this year on buybacks at $476 to $488, and both 2026 acquisitions were paid in cash, with no shares issued.
Potential2/4 →
Beyond a ten-year Tokio Marine reinsurance deal nothing is signed; upside rests on spending $359.2B well, in a $976.8B insurance market whose prices are falling.
Risk profile3/4 →
Five stocks are 66% of a $323.8B portfolio and PacifiCorp's wildfire losses have no stated ceiling, though no customer or single regulator dominates.
Valuation3/4 →
At 1.44 times net worth the price sits near its twelve-year median, and the businesses near 11.9 times earnings; well above the 1.25 low.
Evidence quality3/4 →
Central figures are filed or regulator data, but GEICO's outlook and BNSF's target are management statements, and no earnings call ever cross-examines them.
The Verdict
We rate Berkshire Hathaway neutral. It is a solid business: its insurers have kept more of each dollar customers pay than the industry for years, it owns one of the two big railroads in the western US, and it holds far more cash than it owes. The price is fair, about what its own history says the company is worth, and a little above where it bought back its own shares. The view hinges on car insurance: GEICO's profit is falling from a record, and the cash will earn less if interest rates fall.
The long caseBerkshire's insurers and cash ride the insurance price cycle and interest rates; both are past their best, so insurance prices and interest earned must not fall far.
The evidence under this - 7 claims
The letter is the company's own reckoning and is unaudited; the 10-K gives segment underwriting but no twenty-year average.
- The comparison is not like for like: Berkshire's mix is heavy in reinsurance and car insurance, and the NAIC figure covers every line, including ones Berkshire barely writes.
- GEICO's own combined ratio was 90.7% in 2023, close to the industry, so the edge has not been constant inside the group (C08).
- Net worth counts the stock portfolio at market value but the operating businesses at what was paid for them, decades ago in some cases, so 1.44 understates how cheap the businesses may be.
- Management bought at 1.37 to 1.40 and the chief executive bought $15.3M of shares in March 2026, a sign insiders thought the stock cheap near today's level (C34).
The company
Berkshire Hathaway owns businesses outright. The biggest is insurance: GEICO sells car insurance straight to drivers, and other units insure companies and take on part of other insurers' risks. It also owns BNSF, a railroad with about 32,500 miles of track in the western US, power and gas utilities serving 5.4M customers, and makers and sellers of everything from aircraft parts to chemicals, homes and truck-stop fuel.
In 2025 the whole group sold $371.4B of goods and services.
The evidence under this - 4 claims
How it makes money
Insurance makes money twice. Customers pay before claims arrive, so Berkshire holds their money for months or years and invests it. If premiums cover the claims, that money costs nothing. In 2025 underwriting earned $7.3B after tax and the invested money another $12.5B. The railroad, the utilities and the factories earned the rest of the $44.5B, and they pay their profits up to the parent, which decides where to spend them.
The evidence under this - 2 claims
The letter is the company's own reckoning and is unaudited; the 10-K gives segment underwriting but no twenty-year average.
Where the money comes from, stream by stream
| Stream | Share of sales (FY2025) | How it earns it |
|---|---|---|
| Insurance | 28.1% | Premiums from GEICO car insurance, other primary insurers and reinsurance, plus income from investing the float those premiums leave behind. |
| Manufacturing | 21.1% | Industrial, building and consumer products made by dozens of owned companies, from Precision Castparts to Clayton Homes; OxyChem joined in 2026. |
| McLane | 13.7% | Wholesale distribution of groceries and food service supplies to convenience stores, discount retailers and restaurants, on thin margins. |
| Service and retailing | 11.5% | NetJets fractional aircraft, auto dealerships, furniture and jewellery stores, leasing and other service businesses. |
| Pilot | 11.4% | Fuel and convenience sales at Pilot Flying J truck stops, plus fuel wholesaling. |
| Berkshire Hathaway Energy | 7.1% | Regulated electricity and gas sold in exclusive territories, gas pipelines and renewable power, at rates set by regulators. |
| BNSF | 6.3% | Freight rates for moving consumer goods, coal, farm and industrial products over about 32,500 route miles in the western US. |
Who runs it
Greg Abel took over from Warren Buffett as chief executive in January 2026, after running the energy business and then everything outside insurance. Ajit Jain still runs insurance. Insiders own about a seventh of the company, nearly all of it Warren Buffett's. Abel's pay is a fixed salary: by stated policy nothing rides on profit or the share price, and the company pays no one in stock.
The evidence under this - 4 claims
Why it wins, and who could beat it
Why customers come back
Size and patience. Berkshire's US insurers hold about $333B of capital, far more than the risks they write need, so they can take on very large single risks that smaller rivals cannot, and write less when prices fall instead of cutting rates.
The result shows up against the whole industry. From 2021 to 2025 Berkshire paid out about 91 cents in claims and costs for each dollar customers paid; the industry, in its regulators' own data, paid about 99 cents.
The evidence under this - 4 claims
The letter is the company's own reckoning and is unaudited; the 10-K gives segment underwriting but no twenty-year average.
- The comparison is not like for like: Berkshire's mix is heavy in reinsurance and car insurance, and the NAIC figure covers every line, including ones Berkshire barely writes.
- GEICO's own combined ratio was 90.7% in 2023, close to the industry, so the edge has not been constant inside the group (C08).
The threat
In car insurance, Progressive and Allstate are cutting prices, and GEICO says the rate rises that rebuilt its profit have cost it customers. In reinsurance, other insurers and investors are offering property cover more cheaply. On the railroad, Union Pacific runs a parallel network more efficiently and has agreed to merge with Norfolk Southern into a coast-to-coast line.
The evidence under this - 4 claims
- Berkshire's reinsurance underwriting rose in Q2 2026 to $1,138M from $1,045M, and the Tokio Marine contract added premium, so writing less has not yet meant earning less there (C13).
- The NAIC data shows the industry still writing at 92.9% in 2025, profitable by historical standards (C05).
The rivals: PGR, ALL, UNP, NSC, and 5 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| PGR · ALL | Progressive and Allstate cutting car insurance pricesPriced against it: One segment only | Insurance | On sale | One segment only |
| Private | State Farm and USAAPriced against it: Private | Insurance | On sale | Private |
| Not listed | Other reinsurers and catastrophe bonds adding property capacityPriced against it: Not listed | Insurance | On sale | Not listed |
| UNP · NSC | Union Pacific, merging with Norfolk SouthernPriced against it: One segment only | BNSF | Announced | One segment only |
| Not listed | Truck linesPriced against it: Not listed | BNSF | On sale | Not listed |
| In-house | Alternative energy suppliers and customers generating their own powerPriced against it: In-house | Berkshire Hathaway Energy | On sale | In-house |
| Not listed | Rival manufacturers, distributors and retailers in each marketPriced against it: Not listed | Manufacturing, service and retailing | On sale | Not listed |
How big it could get
How big this could get
American insurers collected $976.8B of property and casualty premiums in 2025, 4.1% more than the year before, by the regulators' count. GEICO alone wrote $45.2B of that, about 4.6%. Nobody publishes the market by line and by company for free, so the size of each piece is not measured here. The railroad, utilities and factories are not sized at all.
The evidence under this - 2 claims
Who has signed
Two reinsurance contracts run for years: a 20% share of Insurance Australia Group's business until the end of 2029, and a new ten-year share of Tokio Marine's that started in April 2026 and added $483M of premiums in its first quarter. Everything else renews policy by policy.
The evidence under this - 2 claims
Where the growth is coming from, business by business
Where the growth is coming from
| Business | Share of revenue | Growth: last quarter | Last half-year | Last year |
|---|---|---|---|---|
| Manufacturing, service and retailing | 61% | +15.2% | - | - |
| Insurance | 26% | -0.3% | - | - |
| Berkshire Hathaway Energy | 7% | +4.9% | - | - |
| BNSF | 7% | +14.4% | - | - |
| Whole company | 100% | +10.0% | - | - |
The filed split through 2026-06-30. These rates are not carried forward: the reading below says why.
How we read it: Manufacturing's 15.2% includes OxyChem, bought in January 2026, and BNSF's 14.4% includes fuel surcharges; neither rate can be carried forward, so the score reads the flat 2023 to 2025 record.
The results
The numbers
Sales grew 3.9% over the twelve months to Jun 2026, about the same pace as the 0.0% in the year to Dec 2025.
It keeps 22% of sales as profit, down from 26% in the year to Dec 2023.
Yearly sales growth has ranged from +0.0% to +21% over the last 5 years.
Shareholders' money earned 12% a year, down from 19% in the year to Dec 2021.
It turned 6.3% of sales into free cash, $24.2B over the last twelve months.
Free cash flow was 0.3 times net income.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-04. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $276B | $302B | $364B | $371B | $371B | $385B |
| Sales growth | +12% | +9.4% | +21% | +1.9% | +0.0% | +3.9% |
| Profit | ||||||
| Net margin | 33% | −7.5% | 26% | 24% | 18% | 22% |
| What growth costs, per sales dollar | ||||||
| Capital spending | 4.8% | 5.1% | 5.3% | 5.1% | 5.6% | 5.8% |
| Cash | ||||||
| Cash from operations | $39.4B | $37.4B | $49.2B | $30.6B | $46.0B | $46.6B |
| Free cash flow | $26.2B | $21.9B | $29.8B | $11.6B | $25.0B | $24.2B |
What growth costs
Berkshire does not report the costs that show what winning a new sale costs, so we cannot say whether growing makes it more or less profitable. Spending on rails, power lines and plants takes a slightly larger share of sales than two years ago, and most recent growth came from buying companies rather than growing its own.
The evidence under this - 2 claims
The last report (8 Aug)
Quarter ended June 2026, filed figures.
Operating profit, which leaves out swings in the stock portfolio, was $12.98B in Q2 2026 against $11.16B a year earlier. The growth came from the railroad, the utilities and the factories, helped by two purchases.
Insurance went the other way. GEICO paid out 91.2 cents of each dollar customers paid, up from 83.5 cents, as injury claims became more frequent and more expensive, and its underwriting profit fell to $994M from $1.82B. Investment income on the insurers' money fell too, as interest rates were lower than a year before.
What it did to the thesisIt confirmed that the railroad, utilities and factories are growing, partly through purchases, and that insurance profit is coming down from its peak. It left open how far car-insurance margins fall, which is the question the view turns on.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $6.02 against $5.13 expected.
The evidence under this - 5 claims
What management did with the money
Berkshire bought back $4.8B of its own shares in the first half of 2026, most of it in May and June at $476 to $488 a share, under a rule to buy only below what the chief executive thinks the business is worth. It paid cash for its two 2026 purchases, OxyChem and Taylor Morrison, and issued no shares.
Insiders in 2026Q3: 6 purchases and 8 sales, from their Form 4 filings.
The evidence under this - 2 claims
The price, and where we disagree
In short. Fair. The price pays for the businesses as they are today, with the cash counted at face value, and leaves no extra margin if insurance profit keeps falling.
The founder has handed over. Greg Abel has run the company since January and now decides where the money goes; in September Warren Buffett passed the chairman's seat to his son Howard. The share price ended where it started the year, while the business kept earning.
The next test is the Q3 2026 report, due around 7 November: whether GEICO's profit stops falling and the railroad gets cheaper to run.
The evidence under this - 5 claims
How we read the multiple
Net worth, what Berkshire owns minus what it owes, suits a company that is mostly an insurer holding cash and shares. What a buyer pays for:
- The shares are worth about $1,079.5B at today's price.
- Take away $359.2B of cash and Treasury bills.
- Take away $340.8B of shares and bonds, net of tax already set aside.
- About $427.9B is left for businesses that earned $36.0B after tax over four quarters.
- That is about 11.9 times their profit, a profit including GEICO's best year.
Against its own history. It costs about what it usually has at a year-end over the last decade, so a buyer pays neither more nor less than usual.
The evidence under this - 5 claims
- Net worth counts the stock portfolio at market value but the operating businesses at what was paid for them, decades ago in some cases, so 1.44 understates how cheap the businesses may be.
- Management bought at 1.37 to 1.40 and the chief executive bought $15.3M of shares in March 2026, a sign insiders thought the stock cheap near today's level (C34).
- The four quarters include GEICO's peak underwriting; on 2023's GEICO margin the earnings would be about $2B lower after tax and the multiple near 12.6 (A01).
- The 'other' line, which includes interest earned at the parent and equity-method income from Kraft Heinz and Occidental, is left in the earnings and partly overlaps the investments subtracted.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Private or foreign rivals that cannot be priced: State Farm Mutual Automobile Insurance Company, USAA (United Services Automobile Association).
Where we disagree with the market
Without Buffett, Berkshire is a slow conglomerate sitting on cash, and its shares will lag the market.
It is a sound, well-protected business at a fair price, and the next two years turn on car-insurance profit and interest rates.
The market sold the shares down when Buffett's successor was named and again when 2025 profit fell; both times the businesses kept earning and the price came back. What the market may be missing is that the founder matters less to the next two years than GEICO's pricing and what the cash earns.
Against us: the chief executive bought about $15.3M of shares himself in March, near today's price.
What analysts say, and the evidence
The evidence under this - 5 claims
What could go wrong, and how we would know
The risks
- Car insurance gets cheaper. Rivals are cutting prices while injury claims rise, so GEICO could see its profit fall further, toward its 2023 level.
- Interest rates fall. A third of the market value is cash; if Treasury bill rates halved, interest income would fall by about $7.2B a year before tax.
- Wildfire lawsuits grow. PacifiCorp has set aside about $2.85B for wildfires and says further material losses are possible but cannot be estimated.
- Five stocks dominate. Alphabet, American Express, Apple, Bank of America and Coca-Cola are 66% of a $323.8B stock portfolio.
- A new person allocates. Abel decides where $359.2B goes, and the company holds no earnings call where analysts can question him.
The evidence under this - 8 claims
- Berkshire's reinsurance underwriting rose in Q2 2026 to $1,138M from $1,045M, and the Tokio Marine contract added premium, so writing less has not yet meant earning less there (C13).
- The NAIC data shows the industry still writing at 92.9% in 2025, profitable by historical standards (C05).
What we still do not know
- How much of GEICO's lower profit comes from rising claims, and how much from cutting prices to win back customers.
- What return Abel needs before spending the cash on a large purchase, and at what price buybacks stop.
- What PacifiCorp's wildfire losses will total once the Oregon appeals end.
The evidence under this - 3 claims
What would change our view
- Neutral→AttractiveThe price falls to its lowest year-end level in twelve years
It needs:
- ○The price falls to 1.25 times net worth, its lowest year-end level since 2014.about $436.33 today, 13% below the last close
- Neutral→AttractiveUnderwriting holds and the railroad closes its gap, at the company's own buyback price
It needs all of:
- ○GEICO pays out 88 cents or less of each dollar customers paid for a quarter, from 91.2 cents.checked at the next results, due by 7 Nov
- ○The railroad spends 62 cents or less to earn each dollar of revenue, from 65.4 cents.checked at the next results, due by 7 Nov
- ○The price is at or below 1.40 times net worth, where the company bought back shares in June 2026.about $488.69 today, 3% below the last close
We would also be wrong if
- GEICO pays out more than 95 cents of each dollar customers paid for two quarters in a row.
- PacifiCorp's wildfire loss estimate passes $5B.
- Berkshire issues shares to pay for an acquisition.
What is coming
- 7 November 2026 Q3 2026 results and 10-Q: Whether GEICO's combined ratio holds at or below 92.0% and BNSF's operating ratio at or below 66.0%, and whether buybacks continued above the June price.
Every dated event ahead
- 7 November 2026 Q3 2026 results and 10-Q: Whether GEICO's combined ratio holds at or below 92.0% and BNSF's operating ratio at or below 66.0%, and whether buybacks continued above the June price.
- February 2027 FY2026 annual report and Abel's second letter: A full year of underwriting after GEICO's rate cycle, how much the $359.2B of cash earned as rates moved, and how Abel says he will deploy it.
- March 2027 2027 proxy statement: The first pay plan under Abel: whether the salary-only design and the bar on stock pay survive the committee's review, or awards start to ride on the share price.
- 28 January 2028 Union Pacific and Norfolk Southern merger decision: Whether BNSF's main western rival becomes a transcontinental railroad by the deal's outside date, which would test BNSF's margin gap and pricing.
Since we wrote this
- 14 OctNewsBerkshire put another $330M into Bending Spoons, about a 4% holding. View heldBerkshire adds $330M to its Bending Spoons stake.
- 6 OctNewsBerkshire bought about $193M more Lennar stock on 1-2 October. View heldBerkshire adds to its Lennar stake.
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis writtenNeutral, medium convictionWritten two weeks after Buffett handed the chair to his son and five weeks before Q3 2026 results, with the shares at $502.65, unchanged since the end of 2025.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
Also checked 3 times with nothing new to act on.
Sources 17
Sources - 17
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-02Item 1 for every business (GEICO's competitors and A.M. Best shares, BNSF's competitor and size, BHE's exclusive territories, statutory surplus and ratings, the IAG quota share), risk factors (key people, the $15B catastrophe limit, competition), GEICO's three-year underwriting table, consolidated revenue, the deferred tax notebacksC01C07C08C11C14C22C23C25C27C32C35C38C41C42
- S02primarycompany release2026-02-28after-tax operating earnings by business for 2025 and 2024, net earnings, investment gains and impairmentsbacksC02
- S03primarycompany filing2026-08-10balance sheet, equity and share count, cash and securities, top five holdings, debt by issuer and guarantee, buybacks, GEICO, Primary and reinsurance underwriting, Tokio Marine contract, investment income, BNSF and BHE results, segment note, OxyChem and Taylor Morrison, PacifiCorp wildfire contingencybacksC03C09C13C15C16C17C20C24C25C26C28C29C33C42C43
- S04primarycompany release2026-08-08operating earnings by business for Q2 and the first half of 2026backsC03
- S05primarycompany release2026-02-28the combined ratio record, float, GEICO's retention pressure, the cycle and writing less business, BNSF's 34.5% margin and the $230M per point, dividend and communication policy
We produced a combined ratio of 87.1% across our property and casualty businesses in 2025, comparing favorably with our five-year average of 90.7%, ten-year average of 93.0% and twenty-year average of 92.2%
backsC04C10C18C19C36 - S06primaryregulator2026-03-31NAIC P&C, Title and Life Industry Snapshots for the period ended December 31, 2025 National Association of Insurance CommissionersUS property and casualty net premiums written, combined ratio and policyholders' surplus for 2021 to 2025
Below are the December 31, 2025, Industry Financial Snapshots for the Property/Casualty, Title, and Life and A&H insurance industries.
backsC05 - S07primarycompany filing2026-03-02The Progressive Corporation Form 10-K, fiscal year ended December 31, 2025 The Progressive Corporationits rank of second in US private passenger auto on 2024 premiums writtenbacksC12
- S08primarygovernment data2026-10-02FRED series DTB3, 3-Month Treasury Bill Secondary Market Rate, Discount Basis Board of Governors of the Federal Reserve System, via the Federal Reserve Bank of St. Louisthe daily 3-month bill yield, June 2025 to October 2026
3-Month Treasury Bill Secondary Market Rate, Discount Basis
backsC15 - S09primarycompany filing2026-02-06Union Pacific Corporation Form 10-K, fiscal year ended December 31, 2025 Union Pacific CorporationBNSF named as its main competitor on parallel routes, its 59.8% operating ratio, the Norfolk Southern merger agreement and outside datebacksC19C21
- S10primarycompany filing2026-02-20The Allstate Corporation Form 10-K, fiscal year ended December 31, 2025 The Allstate Corporationits description as the third largest personal property and casualty insurer in the USbacksC12
- S11primarycompany release2026-09-18the chairman change, the lead independent director, Buffett's letter
Consistent with the company's long-standing succession plan, the Board has elected Howard G. Buffett, a Berkshire director since 1993, as Chairman of the Board.
backsC35 - S12primarycompany release2026-07-24closing of the acquisition and the combined homebuilding group's size
Berkshire Hathaway Inc. today announced that it has completed its acquisition of Taylor Morrison
backsC26 - S13primarycompany filing2026-09-30each open-market purchase and sale, its price, the holder and the Rule 10b5-1 boxbacksC34
- S14secondaryvendor data2026-10-04Research pack (FMP market tier), frozen beside this thesiscontent/BRK.B/research-pack.jsonclose, 252-session return and its decomposition, consensus history, analyst estimates, insider statisticsbacksC37
- S15secondaryvendor data2026-10-04daily closes from January 2025 and year-end price to net worth from 2014 to 2025backsC38
- S16primarycompany filing2026-03-13director biographies (Abel, Jain), the Compensation Discussion and Analysis and its pay policy, the summary compensation table for 2023 to 2025, beneficial ownership of directors and officers at 4 March 2026, and the holders above 5% of Class BbacksC39C40C41C43
- S17primarycompany release2025-12-11Charles Chang to succeed Marc Hamburg as chief financial officer from 1 June 2026, Nancy Pierce named GEICO's chief executive as Todd Combs left for JPMorgan, Michael O'Sullivan named general counsel, Adam Johnson over consumer products, service and retailingbacksC43