Berkshire Hathaway Acquires $1.24 Billion Stake in Constellation Brands

Warren Buffett's Berkshire Hathaway has made a notable investment of $1.24 billion in Constellation Brands, acquiring over 5.62 million shares, marking its first stake in the alcohol company. Following the announcement, Constellation's stock experienced a 7% surge in after-hours trading, although it has faced a 26% decline year-to-date due to weak consumer demand and potential tariffs on Mexican imports. Analysts view Buffett's investment as a significant vote of confidence, despite the company's challenges in the wine sector, which saw a 12% drop in net sales. Constellation's beer segment, however, remains robust, accounting for over 85% of its total revenue. The investment aligns with Berkshire's strategy of seeking undervalued stocks, as Constellation's forward P/E ratio is at its lowest in over a decade. While short-term volatility is anticipated, Buffett's team is likely banking on the company's long-term value.