Analyst Alexia Burland Howard from Bernstein maintained a Hold rating on Kraft Heinz and keeping the price target at $29.00.
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Alexia Burland Howard’s rating is based on the potential restructuring of Kraft Heinz, which involves separating its faster-growing sauces and condiments business from its slower-growing U.S.-centric grocery business. This proposed split could potentially enhance shareholder value if the spun-off entity, SpinCo, trades at a favorable multiple. However, the exact details of the spin-off are yet to be defined, and there are concerns about the cost dissynergies that could arise from this separation.
Additionally, while there is speculation about a possible acquisition of the faster-growing segment by a company like McCormick, Howard remains cautious about this outcome. The strategic fit is recognized, but the financial feasibility and likelihood of such a transaction remain uncertain. Consequently, the Hold rating reflects a balanced view of these potential opportunities and risks, with a price target set at $29.
In another report released on July 17, UBS also maintained a Hold rating on the stock with a $29.00 price target.