Microsoft shares jump after fourth-quarter earnings beat on AI-fueled cloud growth
On Wednesday, Stifel analysts revised their outlook on Kraft Heinz Company (NASDAQ:KHC) shares, lowering the price target from $31.00 to $30.00 while maintaining a Hold rating. Trading at $29.01, the stock appears undervalued according to InvestingPro analysis, despite trading near its 52-week low of $27.25. The adjustment follows Kraft Heinz’s first-quarter earnings report, which exceeded analysts’ expectations for profit due to reduced variable compensation expenses, although organic sales fell by 4.7%. This decline included a 5.6% drop in volume, partly attributed to a shift in Easter timing contributing approximately 100 basis points.
The company posted earnings per share (EPS) of $0.62, a 10% decrease from the previous year, yet still $0.02 above Stifel’s forecast. Currently trading at a P/E ratio of 13.16 and offering a substantial 5.54% dividend yield, the stock has attracted income-focused investors. Despite the better than expected profits, Kraft Heinz’s North American segment experienced a significant volume/mix downturn of 7.1% in the first quarter of 2025, a steeper drop compared to the 4.5% decline in the last quarter of 2024. For deeper insights into Kraft Heinz’s financial metrics and growth potential, investors can access comprehensive analysis through InvestingPro, which features 8 additional key investment tips for this stock.
Kraft Heinz has also adjusted its full-year 2025 outlook, citing several challenges including diminished expectations for its Away From Home segment, rising commodity prices, and the financial strain from tariffs and regulations. These factors, coupled with volume elasticity, have led to a revision of the company’s strategy.
In response to these headwinds, Stifel has reduced its own FY25 EPS estimate for Kraft Heinz to $2.60, a $0.07 cut, due to anticipated increases in investment for pricing and marketing, lowered sales projections, and expectations of narrower margins. The firm’s decision to lower the price target while keeping a Hold rating reflects the balance between the recent better-than-expected earnings and the ongoing challenges facing the company. Despite these challenges, InvestingPro data shows Kraft Heinz maintains a GOOD overall Financial Health Score, with particularly strong metrics in relative value and profitability.
In other recent news, Kraft Heinz Company reported its first-quarter earnings for 2025, revealing an adjusted earnings per share (EPS) of $0.62, slightly exceeding the forecast of $0.60. However, the company’s revenue of $6 billion fell short of the expected $6.02 billion, with organic net sales declining by 4.7%. The company returned nearly $900 million to shareholders through dividends and share repurchases. Kraft Heinz revised its 2025 guidance, indicating a potential decline in organic net sales by 1.5% to 3.5%. Analyst firms Bernstein and Evercore ISI have both lowered their price targets for Kraft Heinz, with Bernstein adjusting its target to $29 and Evercore ISI to $30, while maintaining Market Perform and In Line ratings, respectively. Evercore ISI cited weaker domestic retail sales and higher media spending as factors contributing to the revised earnings projections. Despite these challenges, emerging markets are showing recovery, with expectations of double-digit growth by the fourth quarter of 2025. Kraft Heinz plans to focus on cost improvements and managing operating costs, including lower incentive compensation, to address these ongoing pressures.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.