Based in Pittsburgh, Pennsylvania, The Kraft Heinz Company (KHC) manufactures and markets food and beverage products in North America and internationally, with eight $1 billion+ brands. Valued at $43.71 billion by market cap, it is one of the world's largest food and beverage companies. Its products include condiments and sauces, cheese and dairy products, refreshment beverages, coffee, and other groceries.
Shares of this food and beverage giant have underperformed the broader market considerably over the past year. KHC has declined 7.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27%. In 2024, KHC stock is down 2.5%, while the SPX is up 11.6% on a YTD basis.
Narrowing the focus, KHC’s underperformance looks less pronounced compared to the US Consumer Goods iShares ETF (IYK). The exchange-traded fund has declined 0.1% over the past year. The ETF’s 6.3% returns on a YTD basis outshine the stock’s loss over the same time frame.
KHC is looking to sell its popular brand Oscar Mayer, known for its hot dogs, bacon, ham, and bologna products. According to a Wall Street Journal report, the sale of Oscar Mayer could fetch between $3 billion and $5 billion. On May 1, KHC reported its Q1 results, with net sales decreasing 1.2% year over year to $6.41 billion, while its adjusted EPS rose 1.5% year-over-year to $0.69. The stock declined over 6% on the earnings release day.
For the current fiscal year, ending in December, analysts expect KHC’s EPS to grow 1.3% to $3.02 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 17 analysts covering KHC stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings and 10 “Holds.”
This configuration is slightly less bullish than three months ago, with eight suggesting a “Strong Buy.”
The mean price target of $39 represents an 8.3% premium to KHC’s current price levels. The Street-high price target of $43 suggests an upside potential of 19.4%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
