Financial Performance - Kraft Heinz's Q3 2025 organic net sales reached $6.2 billion, a decrease of 2.5% compared to the previous year[17] - The company's constant currency adjusted operating income was $1.1 billion, down 17% year-over-year[17] - Adjusted EPS was $0.61, a decrease of 18.7% year-over-year[18] - Year-to-date free cash flow was $2.5 billion, an increase of 23%[18] - Adjusted Gross Profit Margin decreased by 200 basis points to 32.3%[17] Business Segments - North America's organic net sales decreased by 3.8%, with a 0.4 percentage point increase in price offset by a 4.2 percentage point decrease in volume/mix[112] - International organic net sales decreased by 1.4%, with a 1.0 percentage point increase in price offset by a 2.4 percentage point decrease in volume/mix[112] - Emerging Markets organic net sales increased by 4.7%, driven by a 4.0 percentage point increase in price and a 0.7 percentage point increase in volume/mix[112] Investments and Outlook - The company is increasing its investments in marketing, with a target of at least 4.8% of net sales[156] - Kraft Heinz anticipates an adjusted gross profit margin decrease of approximately 100 basis points year-over-year[156] - The company expects interest expense to be approximately $950 million and other expenses to be approximately $250 million[156]

Group 1 - Mizuho has lowered the target price for Kraft Heinz from $29 to $27 while maintaining a "Neutral" rating [1]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Stock Ratings and Analyst Insights - Kraft Heinz Co (NASDAQ:KHC) has a dividend yield of 6.34%. Morgan Stanley analyst Megan Alexander upgraded the stock from Underweight to Equal-Weight, raising the price target from $28 to $29. JP Morgan analyst Ken Goldman maintained a Neutral rating, lowering the price target from $32 to $31 [7] - General Mills Inc (NYSE:GIS) has a dividend yield of 5.15%. Morgan Stanley analyst Megan Alexander maintained an Underweight rating, cutting the price target from $49 to $48. B of A Securities analyst Bryan Spillane maintained a Buy rating, lowering the price target from $68 to $63 [7] - Target Corp (NYSE:TGT) has a dividend yield of 4.84%. Evercore ISI Group analyst Greg Melich maintained an In-Line rating, cutting the price target from $103 to $100. DA Davidson analyst Michael Baker maintained a Buy rating, lowering the price target from $115 to $108 [7] Group 2: Recent Company News - Kraft Heinz announced three new members of its board of directors on October 22 [7] - General Mills reaffirmed long-term growth targets and fiscal 2026 financial outlook during an investor day on October 14 [7] - Target plans to cut around 1,800 corporate roles as part of its strategy to return to growth, according to media reports citing an internal memo [7]

Group 1 - Longleaf Partners Fund reported a return of -0.33% in Q3 2025, underperforming the S&P 500's 8.12% and the Russell 1000 Value's 5.33% [1] - The fund emphasizes investments in real assets and brands that generate growing free cash flow (FCF) per share, with an anticipated rise in FCF multiple from ~10x to the mid-teens [1] - The Kraft Heinz Company (NASDAQ:KHC) experienced a one-month return of -3.13% and a 52-week loss of 27.36%, closing at $25.41 per share with a market capitalization of $29.857 billion on October 23, 2025 [2] Group 2 - Longleaf Partners Fund believes the market is overly focused on legacy headwinds for The Kraft Heinz Company and is missing the value-creating potential of its upcoming split into two businesses [3] - The split is expected to result in the higher-growth Flavor Elevation unit garnering a teens EBITDA multiple, while the stable remaining company could trade at the same multiple as current Kraft valuations, leading to a combined stock price over $40 per share [3] - UBS maintains a neutral stance on The Kraft Heinz Company, noting it is not among the 30 most popular stocks among hedge funds, with 45 hedge fund portfolios holding the stock at the end of Q2 2025 [4]

Core Insights - The Kraft Heinz Company (KHC) is expected to report declines in both revenue and earnings for the third quarter of 2025, with revenues projected at $6.26 billion, reflecting a 2% decrease year-over-year [1][8] - The earnings consensus has been revised downward to 57 cents per share, indicating a 24% decline from the previous year's quarter [2][8] Revenue and Earnings Projections - The Zacks Consensus Estimate for KHC's revenues is $6.26 billion, which represents a 2% drop from the same quarter last year [1][8] - The earnings per share estimate has been adjusted down by one cent to 57 cents, projecting a 24% decline compared to the year-ago quarter [2][8] Factors Impacting Performance - KHC is facing challenges in volume performance, which is affecting top-line growth due to shifting consumer preferences and macroeconomic pressures such as tariffs and inflation [3][4] - The company is experiencing a projected year-over-year decline of 2.8 percentage points in volume/mix, leading to an expected drop of 2.3 percentage points in organic net sales [4][5] Margin Pressures - KHC is dealing with margin pressure attributed to unfavorable volume/mix shifts, rising manufacturing and procurement costs, and adverse foreign currency impacts [4][5] - The adjusted gross margin is expected to contract by 140 basis points year-over-year to 32.9% in the third quarter of 2025 [5] Growth Strategies - The company is pursuing growth through targeted pricing, operational efficiencies, and innovation, with its Brand Growth System gaining momentum [6]

Core Insights - Kraft Heinz (KHC) is anticipated to report a year-over-year decline in earnings due to lower revenues for the quarter ended September 2025, with earnings expected to be $0.57 per share, reflecting a -24% change, and revenues projected at $6.26 billion, down 2% from the previous year [1][3]. Earnings Report Expectations - The earnings report is scheduled for release on October 29, and if the results exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2]. - Management's discussion during the earnings call will significantly influence the sustainability of any immediate price changes and future earnings expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.43% over the last 30 days, indicating a bearish sentiment among analysts regarding Kraft Heinz's earnings prospects [4]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.81%, combined with a Zacks Rank of 4, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, Kraft Heinz exceeded the expected earnings of $0.64 per share by delivering $0.69, resulting in a surprise of +7.81% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates four times [14]. Industry Comparison - Mondelez (MDLZ), a competitor in the food industry, is expected to report earnings of $0.73 per share for the same quarter, indicating a year-over-year change of -26.3%, with revenues projected at $9.74 billion, up 5.9% from the previous year [18][19].

Core Viewpoint - The Kraft Heinz Company (NASDAQ:KHC) is facing challenges ahead of its Q3 earnings release, with concerns over weak sales trends and margin pressures, despite being recognized for its high dividend yield [2][3][5]. Group 1: Earnings Outlook - UBS maintains a Neutral rating on Kraft Heinz with a price target of $27 ahead of the Q3 earnings release scheduled for October 29 [2]. - The current market setup is described as "tricky," with investor unease stemming from the company's weak fundamentals and declining US sales trends [3]. - UBS anticipates a difficult third quarter for Kraft Heinz, citing ongoing margin pressures and persistent weakness in sales [3]. Group 2: Stock Performance - Kraft Heinz shares have lagged behind since the second-quarter results, despite appearing undervalued relative to historical averages [4]. - UBS plans to remain on the sidelines until there is clearer evidence of improving fundamentals or confidence that the upcoming corporate split will create meaningful shareholder value [4]. Group 3: Dividend Appeal - Despite the challenges, Kraft Heinz continues to attract income-focused investors with its reliable dividend payments, offering a quarterly dividend of $0.40 per share and a dividend yield of 6.25% as of October 21 [5].

Core Viewpoint - The analysis of Kraft Heinz (KHC) stock presents a bullish perspective despite prevailing skepticism and negative ratings from analysts and traders [2][3]. Group 1: Market Sentiment - KHC stock is rated as an 88% Strong Sell according to the Barchart Technical Opinion indicator, with a consensus Hold from analysts, where only 2 out of 22 analysts express an optimistic view [2]. - Options trading activity for KHC shows a total volume of 25,183 contracts, which is 17.34% below the trailing-month average, indicating a lack of enthusiasm among options traders [2]. Group 2: Valuation Metrics - KHC stock is currently trading at a trailing-year earnings multiple of 22.43, which is lower than the multiple of 27.67 recorded in December 2024, suggesting a potential undervaluation [3]. - The stock has declined 16% year-to-date, leading some to speculate that it may be due for a rebound, although this assumption requires further validation [3]. Group 3: Analytical Approach - The analysis emphasizes the importance of questioning the validity of claims made in market analysis, highlighting that unsatisfactory answers may indicate a lack of rigorous analysis [3][4]. - The distinction between traditional market analysis and irrational market behavior is noted as challenging, with the validity of approaches being observer-dependent and subject to shifting goalposts [4].

Group 1 - The Kraft Heinz Company (NASDAQ:KHC) is considered one of the best beaten down stocks to buy according to hedge funds, despite facing challenges in its North American segment and geopolitical instability affecting sales in Emerging Markets [1][2] - Analyst Robert Moskow from TD Cowen maintained a "Hold" rating on KHC with a price objective of $28.00, reflecting concerns over the company's performance [1] - The company continues to invest in product improvements and manufacturing capabilities, which are yielding positive results in brand and product superiority [2] Group 2 - KHC is the third largest U.S. food and beverage company, but its shares declined following mixed earnings results, with organic sales growth projected at only 1-2% in the medium term [3] - The company is expected to pursue bolt-on acquisitions and share repurchases to ensure positive earnings per share (EPS) growth, alongside a dividend yield above 4% [3] - While KHC shows potential as an investment, certain AI stocks are viewed as having greater upside potential and less downside risk [3]

Core Insights - The Kraft Heinz Company (KHC) is a major global food and beverage entity with a market capitalization of $30.2 billion, formed from the merger of Kraft Foods and H.J. Heinz in 2015, and is known for brands like Kraft, Heinz, Oscar Mayer, and Philadelphia [1] Financial Performance - KHC is expected to announce its fiscal third-quarter earnings for 2025 on October 29, with analysts predicting a profit of $0.57 per share, a decrease of 24% from $0.75 per share in the same quarter last year [2] - For the current fiscal year, analysts forecast an EPS of $2.57, down 16% from $3.06 in fiscal 2024, but expect a slight recovery with an EPS of $2.62 in fiscal 2026, reflecting a 2% year-over-year increase [3] Stock Performance - Over the past year, KHC shares have declined by 29%, underperforming the S&P 500 Index, which gained 14.1%, and the Consumer Staples Select Sector SPDR Fund, which fell by 2.8% [4] - Since February 2017, KHC's stock has lost over 70% of its value, attributed to a focus on cost-cutting, slow adaptation to healthier consumer trends, increased competition, and tighter household budgets [5] Recent Earnings and Market Reaction - Following the Q2 earnings release on July 30, KHC's stock experienced a slight dip, reporting a 2% drop in organic sales and a 1.9% decline in revenue to $6.35 billion, with adjusted operating income falling 7.5% to $1.3 billion; however, adjusted EPS of $0.69 exceeded expectations by 7.8% [6] Analyst Sentiment - The consensus among analysts regarding KHC stock is cautious, with a "Hold" rating overall; out of 22 analysts, 2 recommend a "Strong Buy," 19 suggest a "Hold," and 1 proposes a "Moderate Sell," with an average price target of $28.24, indicating a potential upside of 10.7% from current levels [7]