Using Warren Buffett’s “Buffett-style” Valuation on US Bancorp

I built an Excel file with a valuation model using Warren Buffett’s measure of “owner’s earnings.” 

Warren Buffett’s valuation theory

In an interesting spin on valuation, analysts at AquaResearch applied what they call “Buffett-style, owner’s earnings” valuation calculations to the US Bancorp (USB) company stock in a DCF style approach.  The author supports his review with a link to an excel file which completely lays out Warren Buffett’s valuation theory, that eschews traditional models relying on GAAP and/or price-to-earnings ratios.  The analysis does require viewers to “register” at the site, but it’s free and absolutely worth a look at how the number shake out.

“According to a safe set of assumptions and a Buffett-like valuation model, USB stock is currently overvalued. I wouldn’t be personally buying stock right now as I believe the US stock market is likely to correct significantly in the next 12 months. But this stock, along with other Buffett style valuation “winners” like KO are definitely in my shopping list when a correction does arrive.”