Kraft Heinz (KHC) Stock Forecast & Price Target

Kraft Heinz has announced plans to split its global sauces arm from its North American grocery segment by the second half of 2026, positioning itself to focus on higher growth and margin categories where it holds significant market share. With approximately 85% of sales driven by the retail channel and nearly 25% derived from its international distribution network, the company's global presence enhances its revenue diversification across over 190 countries and territories. Additionally, Kraft Heinz anticipates $300 million in dis-synergy, which is lower than previous estimates, and expects to mitigate a substantial portion of these costs through operational efficiencies.

Kraft Heinz is facing significant challenges, particularly due to its reliance on growth from its Global Growth Company, which constitutes approximately 60% of its total revenue, coupled with a lack of support from its major shareholder, Berkshire Hathaway, which holds about 27% of the company. The firm's financial performance reflects these difficulties, with 2024 revenue reported at $10.4 billion and an EBITDA margin of around 22%, but expectations of initial dis-synergy from its planned split of the global sauces arm from the North American grocery segment may further pressure margins. The company's outlook remains tempered by these factors, which have led to a lowered target valuation based on an assigned EV/EBITDA multiple that underscores existing sales trend challenges.