- Mizuho analyst John J. Baumgartner confirmed the buy recommendation on the shares of Kraft Heinz Co KHC with a target price of $48.00.
- The analyst said the market’s nervousness about food industry pricing and tighter consumer budgets, which are dampening demand more quickly, are a concern for investors.
- Baumgartner added that their consumer surveys showed a clear shift away from discretionary spending, rising consumption and commerce toward lower-priced options across all perimeter categories.
- also read: Kraft Heinz is selling this business as part of an active portfolio optimisation
- Meanwhile, the analyst believes the company is better positioned for three main reasons. First, the weakest members of the portfolio relative to private label were sold. Second, multi-year ingredient improvements mean Kraft is better able to attract consumers who are trading down higher-priced alternatives. Third, greater exposure to opening-price point products and channels increases the portfolio’s appeal to cash-strapped consumers.
- Baumgartner thinks Kraft Heinz is an underrated defensive name.
- Price promotion: KHC shares are trading up 1.37% at $36.55 on the last check Friday.
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