Published 4h ago2026-09-17 11:18:15

Kraft Heinz Positioned for 2027 Growth Rebound, Initiated at Outperform, RBC Says

Kraft Heinz (KHC) is positioned to return to growth in 2027 as results from strategic operational changes gain traction, RBC Capital Markets said in a note Thursday.

RBC initiated coverage of Kraft Heinz stock with an outperform rating and a $32 price target.

The investment firm expects fiscal year 2026 organic net sales to decline by 1% year over year, compared to Kraft Heinz's guidance for a fall of 2% to 0.5%. The company will return to growth in 2027 with a 0.9% rebound, while consensus is for a 0.4% increase, according to the note.

RBC expects earnings per share to increase from $2.05 in 2026 to $2.12 in 2027, placing its current-year estimate in line with the consensus and its next-year view ahead of Wall Street's $2.07 projection. Kraft Heinz guides for adjusted 2026 EPS of $2.03 to $2.09.

"Early evidence would suggest the company's reinvestment in price, innovation and marketing is already having a positive impact, and we expect further improvement over the remainder of 2026 with more of a step function change in 2027," Nik Modi, co-head of global consumer and retail research, wrote in the note.

Earlier this year, Kraft Heinz paused work related to its planned split into two public companies and announced plans for a $600 million investment to drive a recovery in its US business. In August, the company expanded it to about $700 million in 2026.

The returns from the company's changes to its research and development process, resource allocation and incentive program will come later, as investments remain in progress, new product rollouts are completed, and organizational changes continue to take hold, RBC said.

"We believe Kraft Heinz has more improvement ahead of it than behind it," Modi added.

Shares of the company were down 0.4% Thursday. The stock has gained 1.6% this year.

Nearly a decade ago, Procter & Gamble (PG) faced similar issues -- market share losses, stagnant innovation, and pressure from more agile competitors -- prompting it to boost R&D spending and overhaul its go-to-market structure, which yielded financial results within 12 to 18 months, RBC noted.

"Kraft Heinz will be squarely in this 18 month window as we roll into 2027," Modi said.

The company reported better-than-expected fiscal second-quarter results last month and narrowed it full year-earnings per share outlook.

In August, owner of the Planters snack nuts brand Hormel Foods (HRL) lowered its fiscal 2026 sales outlook as it reported mixed third-quarter results, with the top line pressured amid a challenging consumer environment.

Price: $24.67, Change: $-0.07, Percent Change: -0.26%

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