Investors Guzzle Coca-Cola but Cool on Kraft -- Update
July 23 2019 - 6:09PM
Dow Jones News
By Gunjan Banerji
There is a growing rift between shares of Kraft Heinz Co. and
those of Coca-Cola Co.
Kraft shares may have jumped 1.5% on Tuesday but they have
fallen 26% this year, while Coca-Cola has soared almost 15% so far
this year and closed at a record Tuesday.
Analysts aren't expecting Kraft's move higher to last. Few of
them polled on FactSet have a "buy" rating on the company, and
several have revised their outlooks lower. Meanwhile, the forward
price/earnings ratio for the food giant has fallen, FactSet data
show.
Investors soured on Kraft as it was tied up with an internal
investigation into accounting irregularities in its procurement
division that the company revealed in February. It also disclosed
poor earnings results previously. Kraft is trading well below its
52-week high of $64.99, FactSet data show. It closed Tuesday at
$31.95.
A spokesman for Kraft said in an email that Kraft Heinz is
"returning to a path of normalization" with the appointment of a
new chief executive officer and a closure of its internal
investigation.
Meanwhile, investors are more optimistic about Coca-Cola, which
has seen its forward price/earnings ratio rise recently as it has
rolled out a new soda flavor and bought British coffee-shop chain
Costa. It was the best-performing consumer-staples stock on
Tuesday. The beverage giant rose 6.1% Tuesday to $54.33 as its
namesake soft drinks and the introduction of coffee, energy and
other products gave it a boost in sales in its latest earnings
results.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
July 23, 2019 17:54 ET (21:54 GMT)
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