Megan Alexander, an analyst from Morgan Stanley, maintained the Sell rating on Kraft Heinz (KHC – Research Report). The associated price target was lowered to $28.00.
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Megan Alexander’s rating is based on several key considerations. Firstly, Kraft Heinz’s recent announcement of evaluating strategic transactions, although not entirely new, suggests an increased urgency due to the company’s stock underperformance and low valuation. The formal press release indicates a potential shift towards divestitures, especially given the company’s focus on brand segmentation and reports of a possible sale of the Oscar Mayer brand. Mergers and acquisitions in the industry have not historically resulted in significant value creation, which adds to the cautious outlook.
Megan Alexander also notes that the departure of two Berkshire Hathaway board members could negatively impact investor sentiment. While the company stated that the resignations were not due to disagreements, the timing could lead to market speculation about Berkshire Hathaway’s future intentions with Kraft Heinz. This uncertainty, combined with the strategic evaluation, contributes to a less favorable view of the stock, prompting the Sell rating.
According to TipRanks, Alexander is a 3-star analyst with an average return of 4.6% and a 54.12% success rate. Alexander covers the Consumer Cyclical sector, focusing on stocks such as Topgolf Callaway Brands, Vail Resorts, and Life Time Group Holdings.