Kraft Heinz Stock: Is KHC Underperforming the Consumer Staples Sector?
Pittsburgh, Pennsylvania-based The Kraft Heinz Company (KHC) manufactures and markets food and beverage products. With a market cap of $31.3 billion, the company distributes dairy products, sauces, flavored milk powders, and other products.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and KHC perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the packaged foods industry. KHC's strengths include its robust brand portfolio, featuring iconic products like Heinz Ketchup and Kraft Macaroni & Cheese, which drives customer loyalty and revenue. With eight billion-dollar brands, it maintains market dominance, operating in 40+ countries and selling products in 200+ countries. The company also focuses on innovation and sustainability, aiming for recyclable packaging and sustainable sourcing, enhancing its brand image and appeal to eco-conscious consumers.
Despite its notable strength, KHC slipped 27.2% from its 52-week high of $36.53, achieved on Sep. 5, 2024. Over the past three months, KHC stock declined 17.5%, underperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 1.1% losses during the same time frame.
In the longer term, shares of KHC dipped 13.4% on a YTD basis and fell 20.8% over the past 52 weeks, underperforming XLP’s YTD gains of 4% and 5.4% returns over the last year.
To confirm the bearish trend, KHC is trading below its 50-day moving average since late October, 2024, with some fluctuations. The stock has been trading below its 200-day moving average over the past year, experiencing small fluctuations.
On Apr. 29, KHC shares closed up marginally after reporting its Q1 results. Its adjusted EPS of $0.62 beat Wall Street expectations of $0.60. The company’s revenue was $6 billion, matching Wall Street forecasts. KHC expects full-year adjusted EPS in the range of $2.51 to $2.67.
In the competitive arena of packaged foods, General Mills, Inc. (GIS) has taken the lead over KHC, showing resilience with an 18.5% loss over the past 52 weeks but lagged behind the stock with a 14.5% downtick on a YTD basis.
Wall Street analysts are cautious on KHC’s prospects. The stock has a consensus “Hold” rating from the 20 analysts covering it, and the mean price target of $28.85 suggests a potential upside of 8.5% from current price levels.
On the date of publication, Neha Panjwani 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.