Berkshire's New Leadership Confronts a Legacy Investment: Kraft Heinz Under Scrutiny

Berkshire Hathaway, under Greg Abel, considers selling its Kraft Heinz stake after a major impairment charge and disappointing returns, signaling a strategic shift.

In a significant departure from the firm's traditional posture, Berkshire Hathaway's new CEO, Greg Abel, has delivered a frank assessment of one of the holding company's most prominent legacy positions. The investment in Kraft Heinz, a cornerstone of the Warren Buffett era, is now under intense review following a substantial write-down and disappointing returns.

A Strategic Shift Indicated by Impairment

The annual shareholder letter released on February 28, 2026, laid bare the issues Greg Abel sees with the Kraft Heinz stake. Abel confirmed that the returns from this long-held position have fallen "far below an acceptable level." In a move that signals deep concern, Berkshire Hathaway recorded a $3.76 billion impairment charge against its Kraft Heinz holding in 2025. Such a write-down is unusual for a firm synonymous with a perpetual buy-and-hold investment philosophy.

While Berkshire continues to hold approximately 325 million shares, valued at around $7 billion, a recent regulatory filing suggests the conglomerate is evaluating a potential sale. For a company known for holding investments for decades, this consideration alone marks a notable shift in strategy.

Operational Headwinds Undermine Confidence

The underlying performance of the food conglomerate offers little encouragement. Kraft Heinz reported a 3.4% decline in revenue for Q4 2025, which fell to $6.35 billion. Although its adjusted earnings per share of $0.67 surpassed analyst estimates of $0.61, the full-year 2026 guidance provided by management was muted, projecting only $1.98 to $2.10 per share.

This outlook has prompted a reaction from market analysts. Mizuho reduced its price target from $27 to $25, while Zacks Research revised its Q2 2026 earnings estimate downward from $0.68 to $0.51 per share. The consensus earnings expectation for the full fiscal year now stands at $2.06 per share.

Diverging Institutional Sentiment

Despite Berkshire's apparent reconsideration, other institutional investors are maintaining or even increasing their exposure. Mitsubishi UFJ Asset Management boosted its position by 6.8% during the third quarter, accumulating over 2.1 million shares worth nearly $56 million. Overall, institutional ownership remains high, accounting for 78.17% of the company's shares.

One factor potentially anchoring some investors is the maintained quarterly dividend of $0.40 per share, which translates to an annual yield of 6.5%. This income stream may continue to appeal to more conservative shareholders despite the company's operational challenges.

Currently trading at €20.84, Kraft Heinz shares are trading approximately 30% below their 52-week high from late March 2025. Whether the dividend alone can restore broader market confidence remains to be seen. The coming quarters will be critical, with Berkshire Hathaway's subsequent decisions likely to set a definitive course for the stock's future trajectory.