TD Cowen has sustained its Hold rating on Kraft Heinz Company (NASDAQ: NASDAQ:KHC) with a consistent price target of $36.00. The firm's assessment followed a meeting at the headquarters of Kraft Heinz, where management expressed concerns regarding the current challenges facing the company.
Despite acknowledging the improvements made by management since 2019, TD Cowen pointed out the ongoing vulnerabilities within the company's portfolio.
The meeting highlighted a "somber tone" from Kraft Heinz management, particularly in regard to the weaker consumer environment in the U.S.
Additionally, the company is dealing with unforeseen difficulties in key business segments where increased investments have been made. This cautious perspective from the company's leadership underpins the rationale for TD Cowen's reiteration of the Hold rating.
Kraft Heinz has undergone significant changes under the current management team, which took over in 2019. The firm commended these positive developments, suggesting that the company is on a path of transformation. However, the challenges mentioned by management indicate that there are still hurdles to overcome.
Kraft Heinz Company, which is in the midst of a strategic pivot, has been assigned a Sell rating by Goldman Sachs due to significant challenges that may prolong its recovery. The investment firm, however, acknowledges the potential for a turnaround as Kraft Heinz navigates through its transformation phase.
During its recent Q2 2024 earnings call, Kraft Heinz reported a nearly $100 million increase in free cash flow compared to the previous year and returned over $1.5 billion to shareholders through dividends and share repurchases.
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