Berkshire Hathaway's (BRKA) shares could head higher. CEO Warren Buffett provided earnings guidance for the first time in this annual report and shareholder letter. He underscored the company's financial strength and suggest the stock could be heading higher even after a strong opening Monday morning. He estimated that Berkshire's annual "normal earnings power" is about $12B after taxes, or about $7,300 per class A share. Berkshire stock now trades for less than 1.4x year-end 2010 book value of $95,453 a share. Book could end 2011 at around $105,000 a share, based on profits and gains on the $61B equity portfolio. Put a valuation of 1.4x on that projected book value and the stock could trade around $147,000 by year-end.
WARREN BUFFETT BLOG
