Berkshire Hathaway's Stock Near 35% Undervalued Amid Buybacks

Berkshire Hathaway's stock has returned 87.8% over the past 5 years, with management directing over $82b into buybacks since mid-2018. The question now is whether the company's current share price is justified by its returns on capital. The Excess Returns model estimates that Berkshire Hathaway earns $65,244.04 per share on a stable book value of $547,710.90 per share, with a cost of equity of $41,019.23 per share. This implies excess return capacity of $24,224.81 per share and an average return on equity of 11.91%. The intrinsic value of the stock is estimated to be higher than the current price, with some analysts believing it could be up to 35% undervalued.