Pittsburgh, Pennsylvania-based The Kraft Heinz Company (KHC) is a prominent manufacturer and marketer of food and beverage products. Its offerings include sauces, cheese, meals, meats, refreshment beverages, coffee, and more. With a market cap of $42.3 billion, Kraft Heinz’s operations span North America and internationally.
Shares of Kraft Heinz have significantly underperformed the broader market in the past year. Over the past 52 weeks, KHC stock has declined 1.3% versus the S&P 500 Index’s ($SPX) 17% returns. In 2024 alone, KHC dipped 5.8% compared to the SPX’s 9.9% gains on a YTD basis.
Narrowing the focus, KHC has outperformed the Nasdaq Food & Beverage ETF’s (FTXG) 7.9% decline over the past 52 weeks but lagged behind FTXG’s marginal returns in 2024.
Shares of Kraft Heinz rose 4.1% after its Q2 earnings release on Jul. 31. Although the company reported a 3.6% quarterly drop in revenues and missed the consensus topline estimates, it showcased commendable improvement in profitability compared to the year-ago quarter, its gross profit margin increased by 180 basis points to 35.4%. Additionally, it surpassed Wall Street’s EPS projections by 6.9% making investors elated.
For the current fiscal year, ending in December, analysts expect Kraft Heinz to report an EPS growth of 1.3% year over year to $3.02. The company has a history of exceeding the consensus EPS estimates in its quarterly reports.
Among the 16 analysts covering the KHC stock, the overall consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings and eight “Holds.”
This configuration is slightly more bullish than three months ago when seven analysts recommended “Strong Buys.”
On Jul. 31, Barclays PLC (BCS) analyst Andrew Lazar maintained a “Hold” rating with a price target of $34.
KHC’s mean price target of $37.76 represents a premium of 8.4% to current price levels. The Street-high target of $43 indicates a potential upside of 23.5% from current price levels.
On the date of publication, Aditya Sarawgi 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.
