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Sell Rating for Kraft Heinz Due to Strategic Uncertainty and Limited Valuation Potential

Sell Rating for Kraft Heinz Due to Strategic Uncertainty and Limited Valuation Potential

Analyst Peter Galbo from Bank of America Securities maintained a Sell rating on Kraft Heinz and decreased the price target to $29.00 from $30.00.

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Peter Galbo has given his Sell rating due to a combination of factors surrounding Kraft Heinz’s strategic decisions and market valuation. The company’s plan to split into two separate entities, focusing on its grocery and sauces & spreads businesses, raises concerns about the potential for significant value creation. Galbo notes that the assumed split might not lead to a substantial increase in the company’s share price, given the historical valuation ranges of its components.
Additionally, the potential divestiture of key brands like Oscar Mayer adds uncertainty to the company’s future performance. The market’s reaction to similar strategic moves, such as Kellanova’s spin-off, suggests that Kraft Heinz may face challenges in achieving the desired outcomes. Overall, the limited implied valuation potential and the risks associated with the restructuring contribute to Galbo’s Sell rating.

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