Wells Fargo has revised its price target for Kraft Heinz (KHC, Financial), reducing it from $30 to $27 while maintaining an Equal Weight rating on the stock. This adjustment reflects Kraft Heinz's current valuation, which is lower than its historical averages for the next twelve months' price-to-earnings ratios, specifically 12.4, 13.0, and 16.8 over 3, 5, and 12 years respectively.
The firm cites volatility in the North American retail sector and market share declines across key product categories as significant factors influencing this decision. Additionally, there are ongoing concerns about the company's long-term growth, particularly regarding volume and the need for investment, all amid already stringent management of selling, general, and administrative expenses. According to Wells Fargo, these factors position Kraft Heinz's valuation near the current average for its peer group, which is in the range of ten times earnings.
