Morningstar Says Berkshire Hathaway’s Intrinsic Value Is $89 Per Class B Share. I Think They’re Wrong.

I’ve told you in the past that Berkshire Hathaway appears to be trading at the lowest valuation in nearly a decade.  Recently, Morningstar revised its intrinsic value estimate for the Berkshire Hathaway Class B shares, stating they believe the stock has an intrinsic value of $89 per share (equal to $133,500 per Class A share since it takes 1,500 Class B shares to equal a single Class A share). I find this interesting for several reasons.  First, Morningstar’s intrinsic value calculations are often reasonable, in my opinion.  On more than one occasion, we’ve been within a single percentage point after I had valued a firm and then cross checked third-party estimates as part of the process to see if there were major disagreements.  But in this case, I just think they’re wrong.