Sep. 3 at 7:40 PM
Kraft Heinz appears to have bottomed out, says Morgan Stanley, as the planned split into two publicly traded companies limits downside. Analyst Megan Alexander upgraded the stock to equal weight, noting valuation is now reasonable despite fiscal 2026 EPS pressure from higher input costs and North American retail headwinds.
The split will create Global Taste Elevation Co. (
$15.4B sales) with brands Kraft Mac & Cheese, Philadelphia, and Heinz ketchup, targeting >3% long-term organic growth, and North American Grocery Co. (
$10.4B sales) with Lunchables, Oscar Mayer, and Kraft Singles, competing with GIS, SJM, CAG, and CPB.
Shares rose 2.3% to
$26.63, up 3.7% YTD versus S&P 500 (SPX) +9.4%. Warren Buffett (BRK.B, BRK.A) has voiced skepticism, but Morgan Stanley sees strategic merit.
$KHC $GIS $SJM $CAG