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Kraft Heinz (NASDAQ:KHC) shares are down Wednesday after it reported earnings for its latest quarter before the open.
Despite topping estimates, posting second-quarter earnings of $0.70 per share, $0.02 better than the analyst estimate of $0.68, its shares have tumbled more than 7%. Revenue for the quarter also beat estimates, coming in at $6.6 billion versus the $6.38 billion expected.
However, EBITDA of $1.52 billion represented an 11% decline, while net sales fell just under 1% year-over-year.
Even so, analysts were not too downbeat on the report:
A Stifel analyst maintained a Hold rating and $43 per share price target on the stock. In a note, he said he sees the “shares holding around the current level.”
“While sales trends continue to accelerate and stand well ahead of expectations, leading to upside to its sales guidance for the year, the EBITDA outlook remains steady and we believe that will soften some of the excitement around the stronger sales growth trends. We see Kraft Heinz continuing to manage this inflationary environment well and could see a stronger 2H22 profit performance on this basis.”
In addition, a Mizuho analyst, who maintained a Buy rating and $48 per share price target on the stock, said the results were “largely as expected.”
“We view results as very much expected and with multiple positives including pricing and productivity offsetting cost inflation which, in many areas, is demonstrating sequential improvement, and stable market shares despite concerns of trade-down risk. Gross margin missed, but difficulty in modeling the impact of inflationary pricing dilution is a sizable explanation. Net, we don’t anticipate material revisions to consensus FY22 numbers,” wrote the analyst.
