Deutsche Bank downgraded Kraft Heinz
On February 5, Deutsche Bank downgraded Kraft Heinz (KHC) stock from “buy” to “hold” and lowered the target price to $52 per share from $58. Analyst Rob Dickerson thinks that heightened competition could have a negative impact on Kraft Heinz’s financials. Private label products are gaining shelf space as retailers continue to compete on pricing. Large food companies are relying on promotions to push the demand for their products, which is hurting their margins and profitability.
During the last reported quarter, Kraft Heinz posted higher organic sales due to improved volumes across most of its segments. However, lower pricing and promotions remained a drag on the company’s margins. Lower category inflation in dairy and meat also pressured Kraft Heinz’s margins. On January 18, Morgan Stanley lowered the target price on Kraft Heinz stock to $44 from $49.
Rating and target price
Among the 23 analysts providing recommendations on Kraft Heinz stock, 13 recommended a “buy,” six recommended a “hold,” and four recommended a “sell.” Analysts have a consensus target price of $56.05 per share on Kraft Heinz, which implies an upside of 16.4% based on its closing price of $48.14 on February 5.
So far, Kraft Heinz shares have risen 11.8% in 2019. General Mills (GIS) and J.M. Smucker (SJM) stock have risen 14.6% and 12.7%, respectively. Kellogg (K) and Conagra Brands (CAG) stock have risen 3.7% and 3.4%, respectively, in 2019.