No. of Recommendations: 2
Berkshire’s Stock Buybacks Could Reach $50 Billion, Based on This
If Berkshire Hathaway wanted to get more aggressive with its stock buybacks, it could probably repurchase over $50 billion of stock annually, based on its most recent purchase. That’s about 5% of its outstanding shares, based on Berkshire’s market value of nearly $1.1 trillion.
• Many Berkshire investors want the company to get more aggressive with stock repurchases because they consider the shares undervalued and want the company to draw down its cash reserves.
Barron’s $50 billion-plus estimate is based on Berkshire’s about $225 million in share repurchases on March 4, when it resumed buybacks for the first time since May 2024. The amount is doable given Berkshire’s earning power of about $45 billion annually and its $373 billion in cash reserves.
• With about 250 trading days a year, Berkshire could repurchase $56 billion of stock if it continued repurchases at a pace of $225 million a day. CEO Greg Abel recently said that Berkshire buys back stock when its shares trade below intrinsic value “conservatively determined.”
• Berkshire doesn’t disclose its estimate of intrinsic value, but its stock now trades for about 1.5 times the company’s year-end 2025 book value, in the middle of its range in recent years.
What’s Next: Although Berkshire can buy nearly 25% of daily dollar volume based on Securities and Exchange Commission guidelines, Barron’s is assuming that Berkshire doesn’t want to buy back more than 10%. That could move the stock and undercut Berkshire’s goal of repurchasing stock as inexpensively as possible.
—Andrew Bary and Janet H. Cho
