Berkshire Is Betting on This Legacy Retail Stock

Berkshire Hathaway (BRK.A, BRK.B) has taken a 2.8% stake in Macy's (M), marking the conglomerate's first investment in the department store chain in six decades. The position is valued at approximately $174 million.

The bet arrives as M executes a restructuring plan that pairs store closures of underperforming locations with upgrades to stronger units. The retailer reported Q1 results showing revenue growth and a significant jump in earnings, though specific figures were not disclosed in the filing.

Berkshire appears drawn to M's valuation, which sits around 10 times trailing earnings—a multiple characteristic of the value investments favored by the Omaha-based firm. The stake stands in contrast to Wall Street sentiment: analyst consensus price targets currently sit below M's trading level, signaling broader skepticism about the turnaround's durability.

The timing suggests Berkshire sees potential in the legacy retailer's cost rationalization and capital allocation, betting that operational improvements will close the gap between current multiples and intrinsic value.