Warren Buffett Not Interested in Purchasing Train Company: CNBC Report

Warren Buffett, in an interview with CNBC, stated that Berkshire Hathaway is not in the market to buy a train company. He emphasized that his company is looking for businesses with strong fundamentals and a competitive advantage, and that the rail industry has been facing challenges. Buffett reiterated that Berkshire Hathaway is not actively seeking to acquire a train company.

Warren Buffett, the chairman of Berkshire Hathaway, has reiterated the company's stance on not being in the market to buy a train company. In an interview with CNBC, Buffett emphasized that Berkshire Hathaway is seeking businesses with strong fundamentals and a competitive advantage. The rail industry, he noted, has been facing challenges, which has influenced Berkshire Hathaway's strategic direction [1].

Buffett met with Joseph Hinrichs, the CEO of CSX, earlier this month in Omaha, Nebraska. During the meeting, Buffett made it clear that Berkshire Hathaway would not be making a bid for CSX. Instead, the focus was on enhancing cooperation to make freight rail more efficient. This meeting comes after Berkshire Hathaway's BNSF Railway and CSX announced a partnership to provide new coast-to-coast rail services [2].

The announcement of Buffett's disinterest in acquiring a train company sent ripples through the market. CSX's stock price dropped by about 4.5% after the news, highlighting the volatility around merger speculation in the railroad sector. This volatility underscores the complexity of regulatory hurdles and operational challenges in the industry [3].

Berkshire Hathaway's Q2 2025 operating earnings for its rail division, anchored by BNSF, rose by 6% year-over-year. This performance reflects the division's resilience and role as a durable cash flow generator, a critical asset for Berkshire Hathaway during economic headwinds. Despite the recent denial of merger speculation, BNSF's operational strength remains a cornerstone of Berkshire Hathaway's portfolio [3].

Buffett's denial of the merger speculation also reflects his disciplined approach to capital allocation. The company has $330 billion in liquidity, including $290 billion in dry powder, which provides flexibility to pursue opportunities that meet stringent criteria. Buffett's emphasis on earning what it should through operational fixes aligns with his long-term philosophy of compounding value over short-term headlines [3].

The current valuation of Berkshire Hathaway's stock trades at a 30.5% discount to its estimated intrinsic value, suggesting undervaluation. However, the leadership transition to Greg Abel, who will assume the CEO role by year-end, introduces near-term risks. Abel's active management style may alter investor perceptions of Berkshire Hathaway's capital allocation strategy. Despite these challenges, Berkshire Hathaway's fundamentals remain robust, and the company continues to prioritize long-term thinking [3].

In conclusion, Warren Buffett's reiteration of Berkshire Hathaway's disinterest in acquiring a train company underscores the company's commitment to disciplined capital allocation and long-term value creation. For investors with a multi-decade horizon, the current valuation presents an attractive entry point, provided they weigh the risks of leadership transition and sector-specific challenges.

References:
[1] https://www.cnbc.com/2025/08/25/warren-buffett-is-not-in-market-to-buy-another-railroad-but-he-met-with-csx-ceo-about-greater-cooperation.html
[2] https://www.reuters.com/business/berkshire-hathaway-not-looking-buy-train-company-cnbc-reports-2025-08-25/
[3] https://www.ainvest.com/news/berkshire-hathaway-strategic-rail-position-implications-shareholder-balancing-long-term-resilience-short-term-speculation-2508/