Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Jefferies has lowered its price target on Kraft Heinz Company (NASDAQ:KHC) to $26.00 from $27.00 while maintaining a Hold rating on the stock. The company, currently trading at a P/E ratio of 12.23 and offering a 5.9% dividend yield, is considered undervalued according to InvestingPro’s Fair Value analysis.
The firm noted that Kraft Heinz has recently increased promotional activity, resulting in year-over-year retail price realization declines that are among the highest compared to its peers.
This promotional strategy has led to sequential improvements in U.S. volume and market share, though Jefferies indicated these gains have not yet been sufficient to create a positive inflection point.
Jefferies expressed concerns about center-store softness, consumer response to demand-driving initiatives, and potential dilution from individual asset divestments.
The firm suggested that reports of Kraft Heinz potentially pursuing a split "might prove the best path forward to drive change" for the company.
In other recent news, Kraft Heinz has announced an agreement to sell its Italian infant and specialty food business to NewPrinces S.p.A. The transaction, which includes brands like Plasmon and Dieterba, is expected to close by the end of 2025, pending regulatory approval. Additionally, Kraft Heinz has extended the maturity of its $4 billion revolving credit facility by one year to 2030, in partnership with JPMorgan Chase (NYSE:JPM) Bank, N.A. This amendment also involves revisions to the financial covenant under the credit agreement. In another development, the company will phase out artificial colors in its U.S. products, aiming to eliminate synthetic dyes by the end of 2027. Nearly 90% of Kraft Heinz’s U.S. product net sales are already free from these artificial colors. Furthermore, Kraft Heinz announced an executive transition, with Janelle Aydin set to assume the role of Chief Procurement and Sustainability Officer as of August 1. Meanwhile, Marcos Eloi Lima, the outgoing officer, will remain as an advisor until March 2026. These developments reflect Kraft Heinz’s ongoing strategic initiatives and operational adjustments.
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