Kraft Heinz Faces Investor Skepticism Amid Major Corporate Split

The stock of Kraft Heinz is trading near its lowest point in a year, reflecting deep market concerns as the food conglomerate embarks on a radical corporate restructuring. Despite significant purchases by major institutional investors, a wave of analyst downgrades and lowered price targets underscores the prevailing uncertainty surrounding the planned corporate division.

Market experts have reacted cautiously to the restructuring plans and recent financial guidance. Research firm Zacks downgraded Kraft Heinz shares to a "Strong Sell" rating. Concurrently, analysts at Evercore ISI reduced their price target to $28, while their counterparts at TD Cowen set a target of $26. This pessimistic outlook is mirrored in the share price performance; the stock has declined more than 30% since the start of the year and is currently hovering close to its 52-week low.

Major Funds Bet Against the Grain

In a notable contrast to the negative price action and analyst sentiment, several large institutional investors have been building or increasing positions. Disclosures reveal that Norges Bank, Norway’s central bank fund, established a new stake valued at approximately $276 million. Geode Capital Management increased its holding by 14.7%. Other entities, including Night Squared LP and RBF Capital LLC, initiated new investments. These moves suggest a long-term confidence in the company's post-restructuring future, even as the market prices in near-term risks.

Restructuring Plan Unveiled Amid Industry Consolidation

Kraft Heinz’s decision to split into two separate publicly traded companies is unfolding against a backdrop of significant industry pressure. The timing follows Mars’s completion of its $36 billion acquisition of Kellanova on December 11—the sector's largest deal since the 2015 merger that created Kraft Heinz itself. This environment of consolidation is pushing established players to seek greater efficiency and market focus.

Should investors sell immediately? Or is it worth buying Kraft Heinz?

The company’s strategy involves separating into Global Taste Elevation Co., which will house faster-growing brands, and North American Grocery Co., focused on more stable staple products. However, current operational challenges are tempering expectations. Management has revised its 2025 earnings per share forecast downward to a range of $2.50 to $2.57. Weaker growth in Indonesia and persistent headwinds in the U.S. retail environment are cited as primary pressures.

Dividend Provides a Measure of Stability

Amid the upheaval, Kraft Heinz is maintaining its commitment to shareholder returns. The company confirmed its quarterly dividend of $0.40 per share, payable on December 26. At the current share price, this payout translates to a yield of roughly 6.6%, offering a stabilizing anchor for income-focused investors during the transition period.

While the corporate split is designed to unlock shareholder value, the path to its full implementation is likely to be accompanied by continued volatility. The divergence between institutional buying activity and analyst caution highlights the central debate: whether the long-term strategic benefits will ultimately outweigh the short-term financial and execution risks.