Pittsburgh, Pennsylvania-based The Kraft Heinz Company (KHC) is one of the world’s largest food and beverage companies. Its offerings include sauces, cheese, meals, meats, refreshment beverages, coffee, and more. With a market cap of $38.2 billion, Kraft Heinz’s operations span the Americas, Europe, Indo-Pacific, and internationally.
Companies worth $10 billion or more are generally described as "large-cap stocks," Kraft Heinz fits this bill perfectly. Given the company’s long-standing name in the packed foods industry, its valuation above this mark is not surprising. The company’s extensive brand portfolio includes Kraft, Oscar Mayer, Lunchables, Velveeta, Ore-Ida, Wattie's, and more.
However, the food and beverage giant has fallen to a lofty perch, with its stock trading 19.7% below its 52-week high of $38.96 touched on Apr. 25. KHC stock has plunged over 11% in the past three months, substantially underperforming the Nasdaq Composite’s ($NASX) 15.2% surge over the same time frame.
Over the longer term, Kraft Heinz’s performance looks even grimmer. KHC stock has plummeted 15.4% on a YTD basis and 14.9% over the past 52 weeks, trailing behind NASX’s 33.5% gains on a YTD basis and 38.8% returns over the past year.
To confirm the bearish trend, KHC has traded below its 200-day moving average since early June with some fluctuations and consistently below its 50-day moving average since late October.
Kraft Heinz stock prices declined 3.1% after the release of its disappointing Q3 results on Oct. 30 as its revenues failed to meet Wall Street’s expectations. The company’s revenues have observed a continuous decline in the past quarters across geographies. Moreover, it doesn’t expect to observe its topline recovery in the near term, which has unsettled investors' confidence. Kraft Heinz reported a 2.8% year-over-year decline in net sales to $6.4 billion. Meanwhile, it recorded an enormous $1.4 billion impairment loss during the quarter which resulted in a $101 million operating loss on a GAAP basis.
On a positive note, the company's non-GAAP adjusted EPS grew 4.2% year-over-year to $0.75, exceeding analysts’ estimates by 1.4%.
Kraft Heinz has also underperformed its peer Hormel Foods Corporation’s (HRL) 3.2% gains in 2024 and 4.5% returns over the past year.
Among the 17 analysts covering the KHC stock, the consensus rating is a “Moderate Buy.” The mean price target of $36.12 represents a 15.4% premium to current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- Trading Alert: Megaphone Pattern in Cameco (CCJ) Warrants a Possible Long Iron Condor
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