Where Will Berkshire Hathaway Stock Be in 5 Years?

You might have noticed that Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB), the company helmed by Warren Buffett for some 60 years, recently held its annual shareholder meeting in Omaha. The meeting went well, despite the company now being run by Buffett's successor, Greg Abel, after Buffett stepped down as CEO at the end of 2025. All that might have had you wondering whether you should invest in Berkshire -- and where the company might be in five years.

Let's examine those questions.

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First, I think that investing in Berkshire Hathaway now is a solid move, as long as you plan to hang on to those shares for many years. Why? Well, the company was built to last, and has plenty of growth potential. It's also reasonably valued lately, with a recent forward-looking price-to-earnings (P/E) ratio of 22, not far off from its five-year average of 21.

Where will Berkshire be in five years?

So, what kind of growth can we expect from the company over the coming five years? Well, the stock grew by an annual average of 10.3% over the past five years, and it will very possibly perform somewhat similarly over the coming five years. So you can estimate that its stock price of $476 could grow to around $767.

Now let's look at why it's reasonable to assume continued 10% growth, on average, over a long period. For starters, the company is a conglomerate. It has scores of subsidiaries in various industries, ranging from insurance, energy, and transportation to candy, ice cream, and jewelry. Many of its businesses are rather defensive, meaning that their fortunes don't go up and down with the economy. For example, people will still need car insurance in a market pullback, and they will still need to pay for electricity in a recession.

It's the same with much of Berkshire's massive stock portfolio. Berkshire owns 9.3% of Coca-Cola, for example, and billions of people will keep drinking Coke and its other beverages regardless of the economic environment. It also owns 22% of American Express and, recently, nearly $62 billion worth of Apple stock -- and people will continue to use their AmEx cards, iPhones, and Apple Watches, too. Berkshire can be affected by economic downturns, but it's overall a sturdy business.

Some worry that things will change a lot now that Greg Abel is holding the reins. But he has explained that he aims to maintain Berkshire's culture and policies. When asked at the meeting whether he would consider breaking up Berkshire, he answered: "We see our conglomerate structure working without the bureaucracy and bloated costs... We do not see ourselves divesting subsidiaries for that reason or ever breaking off a group."

There will likely be some changes at Berkshire, though, and one might be the institution of a dividend, if Abel thinks the company has more cash than it can use productively. (Its cash hoard was recently around $380 billion.) But overall, Berkshire will remain invested in lots of solid, growing companies, run by proven, talented managers. The future looks bright for Berkshire shareholders.

American Express is an advertising partner of Motley Fool Money. Selena Maranjian has positions in American Express, Apple, and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.