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Investing.com - Bernstein analyst Alexia Howard has reiterated a Market Perform rating and $30.00 price target on Kraft Heinz Company (NASDAQ:KHC), the $31.5 billion food giant currently trading near its 52-week low at $26.65. According to InvestingPro data, the company offers a substantial 6% dividend yield.
The analyst examined potential deals following Kraft Heinz’s planned split into Global Taste Elevation Company (GlobalCo) and North American Grocery Company (NA GroceryCo), analyzing scenarios using a 30% takeout premium and specific debt and valuation multiples. With annual revenues of $25.3 billion, the company appears undervalued according to InvestingPro’s Fair Value analysis.
Howard noted that a McCormick/GlobalCo transaction has generated the most inquiries, estimating it would result in approximately 0.5% per-share dilution for McCormick if cost synergies reached 6%, while adding that McCormick is likely too small to acquire the larger GlobalCo.
Other potential combinations, including General Mills/GlobalCo and NA GroceryCo/Conagra, showed less favorable dilution estimates at -17% and -23% respectively, assuming the same 6% cost synergy target.
The analyst also considered international buyers including Unilever, Nestlé, and Danone, but indicated these companies are pursuing different strategic directions and would likely not be interested, according to Bernstein’s European team.
In other recent news, Kraft Heinz Company is undergoing significant changes as it plans to split into two separate entities: a North American Grocery business and a Global Taste Elevation company. This transaction, expected to close in the second half of 2026, has led to various reactions from analysts and stakeholders. Bernstein has reiterated a Market Perform rating with a $30 price target, while Stifel has lowered its price target to $28, maintaining a Hold rating. In contrast, Morgan Stanley upgraded Kraft Heinz to an Equalweight rating, raising its price target to $29, citing stabilization in the company’s outlook.
Additionally, Moody’s Ratings has placed Kraft Heinz’s ratings under review for a potential downgrade due to the planned split. This review includes several of the company’s senior unsecured and commercial paper ratings. Meanwhile, Warren Buffett expressed disappointment over the split, noting that the dismantling of the company may not resolve its underlying issues. These developments highlight the mixed sentiments surrounding Kraft Heinz’s strategic decisions.
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