Greg Abel's First Move as CEO: Potential $8.5 Billion Sale of Kraft Heinz Stake
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Source: Fool
- Executive Transition: Greg Abel has recently taken over as CEO of Berkshire Hathaway and is already considering a significant move by potentially selling its $8.5 billion stake in Kraft Heinz, indicating a strategic reassessment of the company's investments.
- Shareholding Details: Berkshire Hathaway currently owns approximately 325 million shares of Kraft Heinz, valued at about $8.5 billion, which constitutes roughly 3.2% of its $267 billion portfolio, highlighting its significant position in the company.
- Historical Context: Since the merger of Kraft Heinz in 2015, Berkshire has been the largest shareholder, holding 27.5% of the shares; however, with the stock price plummeting over 75% since 2017, Abel's potential sale may reflect a reconsideration of past decisions.
- Market Reaction: Kraft Heinz's stock has been in decline since the merger, currently priced at $22.40 per share, with an average annual return of about -11%, suggesting that Abel's decision could significantly influence Berkshire's future investment strategies.
Analyst Views on KHC
Wall Street analysts forecast KHC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KHC is 25.86 USD with a low forecast of 24.00 USD and a high forecast of 28.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
0 Buy
14 Hold
1 Sell
Hold
Current: 23.580
Low
24.00
Averages
25.86
High
28.00
Current: 23.580
Low
24.00
Averages
25.86
High
28.00
About KHC
The Kraft Heinz Company manufactures and markets food and beverage products around the world through its eight consumer-driven product platforms: Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee, and Meats. The Company has two reportable segments defined by geographic region: North America and International Developed Markets. Its other segments, consisting of West and East Emerging Markets (WEEM) and Asia Emerging Markets (AEM), are combined and disclosed as Emerging Markets. It manufactures its products from a wide variety of raw materials. Its brands include Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Capri Sun, Maxwell Apartment, Kool-Aid, Jell-O, Heinz, Golden Circle, Wattie’s, Plasmon, Heinz, ABC, Master, Quero, Kraft, and Pudliszki, among others. The Company’s products are sold through its own sales organizations and through independent brokers, agents, and distributors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
