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As Berkshire Exits Its Kraft Heinz Position, Is the Stock a Sell?
Submitted by Jordan Chussler. Posted: 1/27/2026.
At a Glance
- Newly entrenched Berkshire Hathaway CEO Greg Abel has decided to share the company’s 28% stake in consumer staples giant Kraft Heinz.
- The move comes after shares of KHC, which are down more than 3% year-to-date, lost 21% in 2025.
- Kraft Heinz has seen top-line contraction for eight consecutive quarters, resulting in analysts assigning the stock a consensus Reduce rating.
Last week it was reported that newly instated Berkshire Hathaway (NYSE: BRK.B) CEO Greg Abel has initiated the process to sell the company's nearly 28% stake—or roughly 325 million shares—in consumer staples giant Kraft Heinz (NASDAQ: KHC).
The move, which came less than one month after Abel took the reins from his predecessor, Warren Buffett, follows a weak start to the year for KHC shares (down more than 3%) after a 2025 that saw the stock slide more than 21%.
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Add your name and claim your free Gold IRA Guide today.But for income investors whose dividend portfolios have relied on the company's high yield for years, does Berkshire's exit—which marks the end of its 10-year stake—make Kraft Heinz an automatic sell?
The Root of Kraft Heinz's Issues
By reported earnings, KHC shares have largely met expectations: the last time the company missed earnings estimates was Q4 2018. But earnings beats do not necessarily translate into sustainable profitability.
Although 2025 included two profitable quarters, Kraft Heinz reported a Q2 loss exceeding $7.8 billion. That loss was driven by a $9.3 billion non-cash impairment charge, along with falling sales amid persistent inflation.
The company, whose roots date back to 1869 (Heinz) and 1903 (Kraft), has relied on aggressive cost-cutting for years, including the controversial zero-based budgeting approach. A decade after the Kraft-Heinz merger, the food conglomerate is still working to reduce the debt taken on in that deal.
To put that challenge in perspective: as of Q3 2025, Kraft Heinz carried more than $19 billion in long-term debt versus roughly $2.1 billion in cash.
At the same time, a weak labor market, shifting consumer confidence and ongoing U.S. dollar devaluation have pushed cash-strapped shoppers toward private-label (store-brand) alternatives, weighing on branded sales.
Can KHC Reverse Course?
In September 2025, Kraft Heinz announced plans to split into two independent, scaled companies. The two entities—tentatively named Global Taste Elevation Co. and North American Grocery Co.—are expected to be finalized in the second half of 2026.
The split aims to create businesses with distinct focuses: Global Taste Elevation will concentrate on sauces and condiments, while North American Grocery will focus on meals and snacks.
The plan has its critics, including Warren Buffett, who has questioned the decision—particularly because the separation is not subject to a shareholder vote.
Long term, the two companies (each to trade under its own ticker) could alleviate some issues that have dogged Kraft Heinz since the merger. In the near term, however, a swift turnaround seems unlikely.
While the company does not report its full-year and Q4 2025 results until Feb. 11, a ninth consecutive quarterly revenue contraction would not be surprising. That trend has contributed to a negative net margin of about 17.35%, indicating Kraft Heinz is currently spending more than it earns.
Meanwhile, a dividend payout ratio near -43% shows the company is not generating sufficient earnings to cover its dividend, raising the risk of future cuts. Kraft Heinz's dividend currently yields about 6.59%, or $1.60 per share annually, but income investors should be prepared for that yield to be reduced given the payout dynamics.
What Wall Street Thinks About Kraft Heinz?
Analyst sentiment on Kraft Heinz is tepid. Of the 23 analysts covering the stock, one rates it a Buy, 17 rate it a Hold and five rate it a Sell. Overall, KHC carries a consensus Reduce rating.
The average 12-month price target is $26.16, implying a bit more than 11% upside from where the stock is trading today. The company scores below roughly two-thirds of peers evaluated by MarketBeat and ranks 73rd out of 149 stocks in the consumer staples sector. Compounding concerns, Kraft Heinz's financial health falls into the Red Zone, per Tradesmith, where it has remained for more than 19 months.
Institutional ownership remains above 78%, though that share is likely to decline once Berkshire Hathaway completes its sale. Short interest of 4.37% indicates bears are watching the stock for potential further downside in the year ahead.
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