Goldman Sachs surprised the market on June 25, 2025 by upgrading Kraft Heinz (KHC) from Sell to Neutral, lifting its price target from $25 to $27 â signaling a mild upside but still cautious outlook on the fundamentals.
đ ïž Strategic Review Sparks Hope
Goldmanâs analysts pointed to Kraft Heinzâs ongoing review of its portfolio strategy as a reason for optimism. This includes possible divestitures of underperforming brands like Oscar Mayer or Maxwell House, as well as share buybacks or M&A activity. These actions are being seen as levers that could unlock shareholder value and stabilize the companyâs underwhelming recent performance.
âïž Balanced Risk vs Reward
While the company still faces challenges like flat revenue growth and loss of market share in core categories, the risk-reward profile has shifted. Goldman now sees less downside and a potential for moderate upside, thanks largely to managementâs willingness to shake up its portfolio.
đ” Dividend Fundamentals
Kraft Heinz currently offers a strong dividend yield of around 6.2%, paying$0.40 per share quarterly ($1.60 annually). With a payout ratio near 73%, the dividend remains sustainable for now. The companyâs consistent cash flow supports the dividend, though any large-scale restructuring or asset sale could influence payout policies going forward.
đ Outlook
This upgrade doesnât suggest a full recovery is underwayâbut it does mean that the worst may be behind. Investors should watch closely for any strategic announcements. If Kraft Heinz successfully executes its plans, the narrative could shift again toward growth. Until then, the stock sits in a holding pattern: not quite bearish, but not yet a breakout story either.