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Can Kraft Heinz Stock Reach $38?

By Demitri Kalogeropoulos – May 18, 2020 at 10:46AM

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The food giant needs to show that its latest sales boost is more than just a fad.

Kraft Heinz (KHC 1.09%) is attracting more positive investor sentiment. The stock just received an upgrade from a Bank of America analyst, who sees a good chance that shares will rise to $38 in the near term.

Analyst Bryan Spillane said the consumer-packaged foods giant could outperform management's latest growth targets for a few reasons, including higher at-home cooking through late 2020. Kraft said in late April that the COVID-19 shelter-in-place moves helped push organic sales to their best quarterly result in years. Executives were cautious in their outlook, though, due to significant risks like slowing economic growth and slumping demand in the foodservice industry.

A mother cooks with her daughter.

Image source: Getty Images.

Kraft stock could jump if the company surpasses that modest outlook. But the bigger question is whether the company can break free from the persistent market share losses investors witnessed through 2019.

CEO Miguel Patricio called those results, which included a 2% sales decline for the full year, "disappointing" back in mid-February. Shareholders will need to review a few quarterly reports to learn whether Kraft has managed a sustainable improvement to those weak operating trends or simply saw a boost from temporary consumer behavior changes related to the COVID-19 pandemic.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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