Kraft Heinz Faces Scrutiny as Major Investor Writes Down Stake

Kraft Heinz US5007541064

The recent financial disclosures from Berkshire Hathaway have cast a renewed spotlight on Kraft Heinz. The conglomerate led by Warren Buffett reported a significant pre-tax impairment charge of nearly $5 billion against its Kraft Heinz investment for the second quarter of 2025. This move, citing a sustained decline in the stock's fair value and Kraft Heinz's announcement of exploring strategic transactions, underscores deepening concerns over the food giant's valuation.

Berkshire Hathaway's decision to classify these losses as "other-than-temporary" is particularly telling. Published in August 2025, this assessment indicates the investor no longer views the previous valuation as justified, prompting a balance sheet adjustment. This echoes challenges from Kraft Heinz's past, including a major write-down in 2019, painting a picture of a company that has struggled for years with brand stabilization and its market worth. The action by a traditionally long-term-oriented shareholder like Berkshire sends a powerful message about the perceived durability of the company's value.

Market Analysts Maintain a Cautious Stance

The sentiment among market researchers aligns with this cautious outlook. On January 14, 2026, UBS analyst Peter Grom reduced his price target for Kraft Heinz shares from $25.00 to $24.00, reaffirming a neutral rating. This target sits close to the current trading level, emphasizing a wait-and-see approach. The broader analyst community largely views the stock as a hold, focusing on structural market challenges and questioning whether management's initiatives can generate enough momentum for a re-rating.

Stock Performance and Technical Context

Kraft Heinz's share price has faced considerable pressure over the past twelve months, trading well below its former highs. The stock closed yesterday at $24.24, approximately 20% below its 52-week peak but holding above a recent low. From a technical perspective, a Relative Strength Index (RSI) reading of 27.6 suggests the equity has entered oversold territory. This combination points to a stock under valuation pressure but not currently being traded in a state of panic.

The Pivotal 2026 Corporate Split

In response to its challenges, Kraft Heinz is pursuing a major strategic overhaul: a plan to separate into two independent, publicly-traded companies in the second half of 2026. The decision, approved in September 2025, outlines the following structure:

• Global Taste Elevation Co.
  This entity will concentrate on higher-margin products such as sauces and spreads, housing iconic brands including Heinz and Philadelphia.

• North American Grocery Co.
  This company will bundle classic mass-market goods like Oscar Mayer and Kraft Singles, with a primary focus on the North American market.

The strategic rationale is to create two focused units with clearer priorities, potentially allowing for more transparent investor valuation. The higher-growth, higher-margin brands could command a premium, while the more mature North American grocery business would be managed separately. However, Berkshire's substantial write-down serves as a reminder that this split is not an automatic solution. The move is designed to unlock value but must contend with an environment where the core valuation is already being questioned.

Looking Ahead: Financials and Execution Are Key

The coming months will be critical, hinging on two primary factors. First, upcoming quarterly results will be scrutinized for trends in revenue, margins, and cash flow beyond the valuation debate. Second, concrete progress on the planned separation—including details on the structure, capital allocation, and governance of the two new entities—will be essential. Only when clarity emerges on these fronts and operational numbers support the transformation will it become clear whether the current valuation pressure can evolve into sustained stability.