Bernstein analyst Alexia Burland Howard has maintained their neutral stance on KHC stock, giving a Hold rating on September 9.
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Alexia Burland Howard’s rating is based on an analysis of Kraft Heinz’s strategic moves and market conditions. The company’s recent decision to split into two entities, GlobalCo and NA GroceryCo, presents potential opportunities but also significant challenges. The anticipated deals involving these entities, such as a possible merger with McCormick or General Mills, are expected to result in per-share dilution, indicating limited immediate financial benefits. Additionally, the likelihood of international buyers showing interest is low due to differing strategic priorities.
Moreover, while the split might offer some accretive potential, the overall impact is projected to be modest. The stock faces near-term pressures, particularly from investor concerns about Berkshire Hathaway’s potential divestment of its substantial stake, following Warren Buffett’s unfavorable reaction to the split. Coupled with ongoing fundamental pressures in the North American market, these factors contribute to the Hold rating, reflecting a cautious outlook on Kraft Heinz’s stock performance.
In another report released on September 9, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $28.00 price target.