Keith Speights, The Motley Fool
5 min read
In This Article:
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Berkshire Hathaway exited its stake in Citigroup in Q1 after first buying the stock in early 2022.
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Wall Street analysts are overwhelmingly bullish about Citigroup.
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Both Buffett and Wall Street could be right about this bank stock.
Warren Buffett became a legend for his investing prowess. These days, though, the 94-year-old billionaire is disinvesting more than he's investing. Buffett's Berkshire Hathaway has been a net seller of stocks for 10 consecutive quarters.
In the first quarter of 2025, Buffett & team reduced Berkshire Hathaway's holdings in six stocks. They also completely exited the conglomerate's positions in two stocks. Citigroup (NYSE: C) was one of them.
But did Buffett make a mistake selling this high-yield dividend stock? Wall Street thinks so.
Buffett first initiated a position in Citigroup in the first quarter of 2022, buying around 55.2 million shares. Although bank stocks seemed to have lost some of their luster in the eyes of the Oracle of Omaha, Citigroup probably looked like a good turnaround play to him.
Shares of the financial services giant had fallen sharply in early 2022, and Citigroup was the only large U.S. bank that traded below its book value. CEO Jane Fraser faced a steep challenge to right the ship.
But Buffett likes solid underlying businesses available at attractive valuations. He scooped up shares of Citigroup and waited for the comeback. At first, the decision to buy the struggling bank stock might have seemed unwise, as Citigroup's shares continued to decline throughout much of 2022 and 2023. Buffett didn't flinch, though. Berkshire even bought another 89,000 or so shares of Citigroup in the first quarter of 2023.
Buffett's patience was rewarded beginning in late 2023. Citigroup, along with the overall stock market, gained momentum that lasted throughout 2024 and into early 2025. Buffett sold most of Berkshire's stake in the big bank in the fourth quarter of 2024 and fully exited the position in the following quarter.
Why did he bail out on Citigroup? We don't know for sure. It could be that Buffett thought Citigroup's turnaround was complete. Whatever his reasoning, Buffett almost certainly locked in a tidy profit for Berkshire by selling the stock when he did.
However, Wall Street seems to think Buffett & team made a mistake by selling all of Berkshire Hathaway's Citigroup shares. Of the 22 analysts surveyed by LSEG in May, 16 rate the bank stock as a buy or strong buy. The others recommended holding Citigroup.
