UPDATE: Kraft Heinz stock downgraded to neutral vs. buy at Goldman Sachs
Shares of Kraft Heinz Co. (KHC) slid 1% Wednesday, after Goldman Sachs downgraded the food company to neutral from buy, citing margin driven risk to its per-share earnings. The move came as part of a broader recalibration of Goldman's estimates and price targets for the food sector against a backdrop of input cost pressure and a lack of pricing power in the U.S. "KHC's earnings growth has outpaced industry peers in recent years as it captured cost savings related to its acquired Kraft asset," analysts led by Jason English wrote in a note. "Cost savings, however, are beginning to deplete and while we see a path to top-line acceleration for the firm, we expect its magnitude of fundamental outperformance versus the group to wane." Goldman is sticking with sell ratings on J.M. Smucker Co. (SJM), General Mills Inc. (GIS), Church & Dwight Co. Inc. (CHD) and Procter & Gamble Co. (PG). Kraft Heinz shares have fallen 11.7% in 2017, while the S&P 500 has gained 13.2%.
-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com
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