Deutsche Bank downgrades Kraft Heinz: Damped outlook despite stable quarterly figures

  • Forecasts for 2024 Lowered, Challenges Due to Prices and Supplier Issues Persist.
  • Deutsche Bank rates Kraft Heinz as 'Hold' and lowers the target price due to subdued growth expectations.

Eulerpool News·

Recent developments at Kraft Heinz have prompted Deutsche Bank to downgrade its rating of the company to 'Hold' and reduce the price target from 39 to 35 USD. The decision is primarily based on muted growth and profitability expectations for the fiscal year 2025 and beyond. Although the results for the third quarter of 2024 largely met forecasts, Kraft Heinz lowered its annual forecast for 2024 to the lower end of the previous range. This signal underscores the 'ongoing pressure' the company is facing. Kraft Heinz management reported a slow recovery of the Lunchables brand, hindered by supplier issues and rising prices for coffee and dairy products. These challenges are expected to persist into 2025, creating a challenging retail environment in the US. Despite encouraging developments in emerging markets and outside traditional retail, Deutsche Bank remains cautious. The possibility that new operational issues could impact short-term earnings persists. Therefore, the bank is closely monitoring the situation and is considering a reevaluation only upon 'significant and consistent improvements'.
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