Mizuho analystJohn J. Baumgartner reiterated the Buy rating on the shares of Kraft Heinz Co KHC with a price target of $48.00.
The analyst said that the market jitters about food industry pricing and tighter consumer budgets moderating demand at a faster rate are causes for investor concerns.
Baumgartner added that their consumer surveys indicated a clear shift away from discretionary spending, increasing consumption, and trading down to lower-priced options across perimeter categories.
Meanwhile, the analyst thinks the company is better positioned for three main reasons. First, the portfolio’s weakest links versus private label have been divested. Second, multi-year enhancements to ingredients better position Kraft to capture consumers trading down from higher-priced alternatives. Third, larger exposure to opening price point products and channels enhances portfolio appeal for cash-strapped consumers.
Baumgartner thinks Kraft Heinz as an underappreciated defensive name.
Price Action: KHC shares are trading higher by 1.37% at $36.55 on the last check Friday.
