BUZZ-Street View: Kraft Heinz faces macroeconomic risks

Reuters
Yesterday
BUZZ-Street View: Kraft Heinz faces macroeconomic risks

** Kraft Heinz KHC.O slashes FY organic sales and profit forecasts with demand for its snacks and ready-to-eat meal kits taking a hit from higher prices and economic uncertainty driven by U.S. tariffs

** U.S. consumer confidence slumps to a nearly five-year low in April as tariff concerns weigh on economic outlook

** Median PT of 24 brokerages covering the stock is $30, with average "hold" rating - data compiled by LSEG

MACRO ENVIRONMENT, TARIFF HEADWINDS

** J.P. Morgan ("neutral," PT: $30) says KHC will face more inflation than expected for items such as coffee and sweeteners that it will have to pass on to customers

** Jeffries ("hold," PT: $27) says while KHC is confident in their strategy, they are unsure when the co's efforts will pay off with added macro uncertainty and promotional activity yet to recover to 2019 levels

** "The price-value equation continues to be a delicate balance for KHC, as well as others in the space, as consumers continue seeking ways to get more for their money" - brokerage

** Piper Sandler ("neutral," PT: $30) says stock faces risks like input costs, shifting consumer performance and currency headwinds

** Stifel ("hold," PT: $30) says softer trends in North America retail business require greater reinvestment, which will pressure KHC's profit growth

** "We believe Kraft Heinz will opportunistically evaluate the existing portfolio to improve the company's growth profile, similar to the recent divestitures of cheese and nuts in the U.S.," brokerage says

(Reporting by Twesha Dikshit)

((Twesha.Dikshit@thomsonreuters.com))

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