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Investing.com -- Kraft Heinz was downgraded by both Bank of America and Citi following its disappointing FY25 sales and earnings outlook, with analysts citing persistent revenue challenges and a lack of meaningful investment to drive future growth.
BofA double-downgraded the stock from Buy to Underperform and cut the price target from $36 to $30, arguing that Kraft Heinz (NASDAQ:KHC) continues to struggle with organic sales growth.
“We struggle to see a path forward to meaningful organic sales improvement over the next 12 months,” the firm stated, pointing to declining volumes in key product categories such as condiments, mac & cheese, and Lunchables.
BofA also highlighted execution issues within the company’s Accelerate platform, which was intended to drive long-term revenue growth but has instead “decelerated meaningfully over the past few quarters.”
Citi also downgraded Kraft Heinz, moving the stock to Neutral from Buy and reducing its price target from $34 to $28.
The bank’s analysts expressed skepticism over the company’s ability to achieve its long-term growth targets, particularly given its limited planned investments in marketing and promotions.
“The company’s 2025 sales and earnings outlook disappointed,” said Citi. “We are not sure that the outlook is fully de-risked.”
They added that the company’s flat marketing spend and reduced promotional activity could further weigh on volumes.
Both banks lowered their earnings estimates, with BofA cutting its 2025 EPS forecast from $2.97 to $2.65, while Citi reduced its projection from $2.97 to $2.68. Analysts warned that additional investment may be necessary in 2026 to reignite growth, potentially keeping earnings under pressure.