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Dillard's Shares Surge After Buffett Fund Manager Purchase, Wedbush Price Target Boost

Billionaire investor Warren Buffett's close associate, Ted Weschler, revealed a 5.89% stake in the struggling retailer in a Friday filing with the Securities and Exchange Commission.

Dillard's Inc.  (DDS) - Get Dillard's, Inc. Class A Report shares surged higher Monday following news of a stake purchased by Berkshire Hathaway's Ted Weschler and a price target boost from Wedbush Securities. 

Weschler, a close associate to billionaire investors Warren Buffett, and one of the group's key fund managers, disclosed a 5.89% stake in the struggling retailer over the weekend, indicating he's holding the 1.08 million shares for the benefit of family members. Wedbush analyst Jennifer Redding, meanwhile, lifted her price target on Dillard's by $16 to $46 per share, citing positive momentum for the group heading into the final months of the year.

Dillard's shares were marked 33.4% higher in early trading Monday to change hands at $56.15 each, a move that would take the stock's six-month gain to around 81.1%.

Dillard's will publish third quarter earnings on November 12. In mid-August, the retailer posed a second quarter loss of 37 cents per share on sales of $919 million.

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U.S. retail sales, meanwhile, slowed in August as the impact of fiscal stimulus from Washington, which expired in late July, faded and applications for unemployment benefits continued to hoover around the 1 million mark.

With around 22 million still out of work, stimulus checks unlikely between now and the end of the year and announced job losses mounting from airlines to banks and insurance companies to oil and gas giants, spending is unlikely to increase in the coming months, adding further pressure on a retail sector that is already losing market share to the likes of Amazon  (AMZN) - Get, Inc. Report, Walmart  (WMT) - Get Walmart Inc. Report and Target  (TGT) - Get Target Corporation Report.