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Investing.com - UBS has reiterated its Neutral rating and $27.00 price target on Kraft Heinz Company (NASDAQ:KHC) ahead of the food giant’s third-quarter earnings report scheduled for October 29. The stock, currently trading near its 52-week low of $24.80, has seen a -25.11% return over the past year, according to InvestingPro data.
The investment firm describes the setup heading into the earnings announcement as "tricky," noting that while discussions have shifted toward Kraft Heinz’s upcoming corporate split, investors remain concerned about pressured fundamentals that have yet to show meaningful improvement. While the company maintains a substantial 6.27% dividend yield, InvestingPro data shows six analysts have recently revised their earnings estimates downward for the upcoming period.
UBS expects a challenging third quarter for Kraft Heinz based on two key factors: U.S. tracked trends remain under pressure and have softened sequentially, and margin pressures are unlikely to ease in the near term.
Kraft Heinz shares have continued to underperform following the second-quarter results, despite valuation appearing cheap compared to historical averages, according to the research note.
UBS indicates it will maintain its sideline position on Kraft Heinz stock unless there is either visibility to improving fundamentals or greater conviction that the planned transaction will unlock meaningful value for shareholders.
In other recent news, Kraft Heinz Company is preparing for a significant corporate restructuring. The board has unanimously approved a plan to split the company into two separate entities: the North American Grocery Company and the Global Taste Elevation Company. This transaction is anticipated to be completed in the second half of 2026. Meanwhile, Kraft Heinz has entered into a multi-year partnership with Maple Leaf Sports & Entertainment, marking the return of Heinz products to venues such as Scotiabank Arena and BMO Field. This agreement makes Heinz the official ketchup of the Toronto Maple Leafs and Toronto Raptors starting with the 2025-2026 season.
On the financial front, TD Cowen has maintained its Hold rating on Kraft Heinz, citing competitive pressures and international challenges that have led to a reduction in sales and earnings estimates. The firm has lowered its third-quarter organic sales estimate to -2.4%, which is below the current market consensus. Similarly, Piper Sandler has reiterated a Neutral rating, highlighting ongoing challenges in retail and increased price competition in deli meats. Bernstein has also maintained a Market Perform rating, setting a price target of $30.00, as it analyzes potential deals following the company’s planned split.
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