synopsis

The analyst highlighted pressure for Lunchables, Kraft Mac & Cheese, Capri Sun, and Oscar Mayer.

Bernstein has reportedly downgraded its rating and price target on Kraft Heinz (KHC), saying the company continues to lose market share in several of its product categories.

The investment firm lowered the rating to 'Market Perform' from 'Outperform' and price target on the company's shares by $3 to $31, according to The Fly. Kraft Heinz stock closed at $30.20 on Tuesday.

Bernstein highlighted flattish to weak growth for four key Kraft Heinz products: Lunchables, Kraft Mac & Cheese, Capri Sun, and Oscar Mayer.

Although short-term challenges like supply disruptions and critical media coverage are fading, the analyst noted that the broader performance trend remains underwhelming.

Lunchables, in particular, may move past the negative impact of the Consumer Reports article from last year, but it is facing growing pressure from lower-priced store-brand alternatives.

In April 2024, Consumer Reports published a critical article highlighting health concerns associated with Lunchables and similar prepackaged lunch kits.

Their tests revealed that these products contained elevated levels of sodium, lead, cadmium, and phthalates — chemicals linked to various health issues.

Bernstein said that nearly 60% of Kraft Heinz’s sales come from eight brands, including Heinz, Philadelphia, Velveeta, and Ore Ida, in addition to the four struggling ones.

On Stocktwits, the retail sentiment for the company was 'neutral'.

One user expressed displeasure with product innovations at the company.

 

Kraft Heinz shares are down 15.3% year to date. The company is scheduled to report its quarterly earnings on April 29.

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