RBC is making a strongly bullish case for The Kraft Heinz Company (NYSE:KHC), pointing to the company’s investment in innovation, pricing, and marketing as evidence that its strategy is beginning to work. The firm expects 2027 to serve as a potential turning point and has provided a detailed case supported by specific operating factors. However, the bullish view comes less than a year after Kraft Heinz paused its breakup plan just six weeks after Cahillane took over to carry out the strategy. One analyst said the reversal pointed to “deeper problems” than had previously been disclosed. The company’s latest innovation efforts may support a more constructive outlook, but they do not erase the concerns raised by its own strategic decision this year.
RBC Sees 2027 as Kraft Heinz Inflection Point
On September 17, RBC initiated coverage of Kraft Heinz with an Outperform rating and a $32 price target. Analyst Nik Modi said the company’s 2026 performance has offered “tangible proof points” that its current strategies are gaining traction. He expects a larger “step-function” improvement in 2027. The analyst pointed to new products such as PowerMac and Capri Sun Hydrate, as well as strategic price reductions and smaller packaging, as evidence that innovation momentum can continue rather than stall. RBC also noted that changes to management incentives now place greater emphasis on market share when determining rewards. Regarding the overhang from Berkshire Hathaway, analyst Nik Modi described the risk as navigable and argued:
So if shares sell off on Berkshire’s supply, we would treat that as an opportunity to add.
A Company That Already Put Its Own Fix on Hold
Kraft Heinz announced plans to split the company last September and brought in former Kellogg CEO Steve Cahillane in January to lead the process. The plan was paused only six weeks later, prompting Deutsche Bank to characterize the reversal as evidence of deeper problems. Steve Cahillane also acknowledged that the company’s pricing strategy had left consumers very disappointed. Beyond the strategic uncertainty, Kraft Heinz’s organic net sales fell 1.3% in Q2 2026, including a 2.7% decline in North America, while North American volume/mix fell 3.8 percentage points. Berkshire’s Greg Abel has also publicly described the investment as disappointing.
Kraft Heinz saw a modest increase in hedge fund ownership, with the number of funds holding the stock rising from 60 at the end of the first quarter of 2026 to 62 at the end of the second quarter. At the same time, short interest remained elevated at 11.49% as of August 31, 2026. The combination of rising hedge fund ownership and elevated short interest highlights a stock where the opposing bull and bear cases remain very much unresolved.
The company has a real pipeline of new products and innovations. However, it’s decision to reverse its breakup plan just six weeks later, combined with the CEO’s comments on pricing and continued headwinds across the sector, suggests that the turnaround still carries more execution risk than RBC’s bullish 2027 outlook implies.
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