Pittsburgh, Pennsylvania-based The Kraft Heinz Company (KHC) is one of the world’s largest food and beverage companies. Its offerings include sauces, cheese, meals, meats, refreshment beverages, coffee, and more. With a market cap of $38.2 billion, Kraft Heinz’s operations span the Americas, Europe, Indo-Pacific, and internationally.
Companies worth $10 billion or more are generally described as "large-cap stocks," Kraft Heinz fits this bill perfectly. Given the company’s long-standing name in the packed foods industry, its valuation above this mark is not surprising. The company’s extensive brand portfolio includes Kraft, Oscar Mayer, Lunchables, Velveeta, Ore-Ida, Wattie's, and more.
However, the food and beverage giant has fallen to a lofty perch, with its stock trading 19.7% below its 52-week high of $38.96 touched on Apr. 25. KHC stock has plunged over 11% in the past three months, substantially underperforming the Nasdaq Composite’s ($NASX) 15.2% surge over the same time frame.
Over the longer term, Kraft Heinz’s performance looks even grimmer. KHC stock has plummeted 15.4% on a YTD basis and 14.9% over the past 52 weeks, trailing behind NASX’s 33.5% gains on a YTD basis and 38.8% returns over the past year.
To confirm the bearish trend, KHC has traded below its 200-day moving average since early June with some fluctuations and consistently below its 50-day moving average since late October.
Kraft Heinz stock prices declined 3.1% after the release of its disappointing Q3 results on Oct. 30 as its revenues failed to meet Wall Street’s expectations. The company’s revenues have observed a continuous decline in the past quarters across geographies. Moreover, it doesn’t expect to observe its topline recovery in the near term, which has unsettled investors' confidence. Kraft Heinz reported a 2.8% year-over-year decline in net sales to $6.4 billion. Meanwhile, it recorded an enormous $1.4 billion impairment loss during the quarter which resulted in a $101 million operating loss on a GAAP basis.
On a positive note, the company's non-GAAP adjusted EPS grew 4.2% year-over-year to $0.75, exceeding analysts’ estimates by 1.4%.
Kraft Heinz has also underperformed its peer Hormel Foods Corporation’s (HRL) 3.2% gains in 2024 and 4.5% returns over the past year.
Among the 17 analysts covering the KHC stock, the consensus rating is a “Moderate Buy.” The mean price target of $36.12 represents a 15.4% premium to current price levels.
