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Why Wall Street Is Still Optimistic about Kraft Heinz

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Analysts maintain a “buy”

The majority of Wall Street analysts have been positive on Kraft Heinz (KHC) stock for a while, as the graph below shows. The primary reason behind Wall Street’s favorable outlook has been the company’s rich history of acquiring big brands. Wall Street expects Kraft Heinz to benefit from the consolidation in the food industry. Analysts expect Kraft Heinz will sooner or later announce a big acquisition that could accelerate its sales and earnings growth rate.

Kraft Heinz expects transitory issues to subside and sales to benefit from expanded distribution and innovation. The company managed to report better-than-expected sales during the last reported quarter. However, the company’s bottom line remained weak, which didn’t sit well with investors.

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Rating and target price summary

Among the 23 analysts providing recommendations on KHC stock, 14 analysts suggest a “buy,” five analysts recommend a “sell,” and four analysts have a “hold” rating. Analysts maintain a consensus target price of $60.73 per share on KHC stock, which implies an upside of 18.6% based on its closing price of $51.19 on November 29.

Besides KHC, Wall Street also has a favorable outlook on Conagra Brands (CAG) and Mondelēz (MDLZ) stock. Meanwhile, analysts remain neutral on other major food companies including Kellogg (K), General Mills (GIS), J.M. Smucker (SJM), and Hershey (HSY).

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