Goldman Sachs has adjusted its price target for Kraft Heinz (KHC, Financial) from $27 to $25 while maintaining a Sell rating. The downgrade stems from ongoing challenges facing the company, including rising costs and weak demand for packaged foods. There is a noticeable consumer shift towards fresh products, coupled with increased competition from private labels and smaller brands. Analysts forecast it might take several quarters of consistent performance for Kraft Heinz to rebuild investor confidence. Consequently, Goldman Sachs foresees limited potential for improvement in the company's estimates in the near future.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for The Kraft Heinz Co (KHC, Financial) is $30.60 with a high estimate of $55.60 and a low estimate of $25.00. The average target implies an upside of 14.48% from the current price of $26.73. More detailed estimate data can be found on the The Kraft Heinz Co (KHC) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, The Kraft Heinz Co's (KHC, Financial) average brokerage recommendation is currently 3.1, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Kraft Heinz Co (KHC, Financial) in one year is $34.74, suggesting a upside of 29.97% from the current price of $26.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Kraft Heinz Co (KHC) Summary page.
KHC Key Business Developments
Release Date: April 29, 2025
- Top Line Results: Delivered in line with expectations.
- Cash Flow Performance: Strong performance reported.
- Balance Sheet: Described as healthy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Kraft Heinz Co (KHC, Financial) delivered top-line results in line with expectations, demonstrating strong cash flow performance and maintaining a healthy balance sheet.
- The company is prioritizing investments in marketing, R&D, and technology to enhance consumer-facing marketing and optimize brand and media allocation for better ROI.
- KHC is scaling up its brand growth system, which has shown success in previous pilots, to cover 40% of its business by the end of the year.
- The company is seeing growth in emerging markets and expects improvement in key product categories like cream cheese and Ore-Ida in the upcoming quarters.
- KHC is actively managing costs and exploring alternative sourcing and reformulation to mitigate the impact of tariffs and inflation on COGS.
Negative Points
- The revised outlook includes a wider operating income guide due to uncertainties in the policy landscape and macroeconomic conditions.
- KHC is facing increased COGS inflation, particularly in commodities like coffee and meats, with an expected impact of 150 to 200 bps due to tariffs.
- The company anticipates gross margin pressure in Q2 due to increased promotional activity, hedge losses, and commodity price peaks.
- Despite investments, KHC's market share performance has been under pressure, with some categories showing softness.
- The company does not expect North America volume to inflect positively in the second half, relying instead on international growth to meet guidance.
