Investors Guzzle Coca-Cola but Cool on Kraft
July 23 2019 - 3:19PM
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 2.7% on Tuesday as of midday but
have fallen 25% this year, while Coca-Cola has soared almost 15% so
far this year and is hovering close to its high for the year.
Analysts aren't expecting Kraft's lurch 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.
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 on 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 5.8% as of midday trading 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 15:04 ET (19:04 GMT)
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