Shares of Kraft Heinz (KHC) advanced 1.9% to close at $24.79 on Friday, a move that defied bearish analyst actions and concerns over the company's financial trajectory. The gain occurred as investors digested a significant strategic shift and updated spending plans from the packaged food giant.
Strategic Pivot and Spending Plans
The company announced it is halting work on a planned corporate separation, opting instead to increase investment in its operations. Kraft Heinz raised its capital expenditure guidance for 2026 to approximately $950 million, up from $801 million in the prior year. CEO Steve Cahillane characterized the company's challenges as "fixable and within our control." The firm also noted a reduction of about 60 positions at its Chicago and Pittsburgh headquarters.
Wall Street Turns Cautious
This strategic recalibration was met with skepticism by some on Wall Street. JPMorgan downgraded the stock to "underweight" from "neutral" and cut its price target to $22, citing a dimmer outlook for organic sales and earnings. Separately, S&P Global Ratings revised its outlook on Kraft Heinz to "negative" from "stable," though it maintained its 'BBB' credit rating, pointing to ongoing margin pressure and uncertainty over the company's ability to stabilize performance.
The company's annual filing revealed net sales of $24.94 billion for the year ending December 2025, down from $25.85 billion the previous year. It also recorded a substantial $6.7 billion non-cash goodwill impairment charge in the second quarter of 2025.
Investor focus now turns to the company's upcoming presentation at the Consumer Analyst Group of New York conference on February 19, where further details on the 2026 plan are expected. The key question remains whether the increased investment will successfully reverse volume declines or further strain cash flow and leverage metrics.
