Kraft Heinz Charts a New Course with 2026 Split and Leadership Shift

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The year 2026 marks a pivotal reset for Kraft Heinz, defined by a new chief executive, a significant portfolio move, and a clear roadmap to separate into two publicly traded companies. The central challenge for the stock is whether this comprehensive strategy can finally close the persistent valuation gap it faces in the market. A critical phase is beginning where the plan must prove its worth to investors.

The cornerstone of the strategic overhaul is the intended separation into two distinct listed entities: Global Taste Elevation Co. and North American Grocery Co.

Global Taste Elevation Co. is positioned as the primary growth engine. This unit will consolidate high-margin, globally recognized brands that management believes deserve a valuation multiple more in line with growth-oriented consumer staples peers.

North American Grocery Co. will focus on the more stable, regionally focused business in North America. Designed for reliable cash generation, this company is expected to appeal predominantly to value and dividend-focused investors.

This split aims to address a long-standing critique: within the current conglomerate structure, faster-growing segments have been diluted by slower, more traditional food businesses. The separation should make the investment profile of each entity clearer, ideally attracting different investor bases. Specifics regarding the capital structures and dividend policies for the new companies remain pending; clarity on these points is expected from the new CEO during the first quarter of 2026.

A New Captain for the Restructuring

Steering this complex process is the newly appointed CEO, Steve Cahillane, who took the helm today, succeeding Carlos Abrams-Rivera. Cahillane joins from Kellanova, bringing direct experience with deep corporate restructurings and mergers—expertise deemed crucial for Kraft Heinz at this juncture.

The appointment follows a challenging 2025 for the share price, which faced sustained pressure due to declining sales volumes and intensified competition from private-label brands. Consequently, expectations for the new leader are high: he must shift market sentiment and, most importantly, ensure the smooth execution of the planned separation in the latter half of 2026.

Portfolio Pruning: Exit from Italian Baby Food

Aligning with the leadership change, Kraft Heinz finalized a key portfolio adjustment just before year-end. On December 31, the company sold its Italian infant and specialty food business to NewPrinces.

The transaction details are as follows:

• Sale Price: $146 million in cash
• Brands Included: Plasmon, Nipiol, Dieterba, Aproten, and Biaglut
• Infrastructure: The production facility in Latina, Italy, was transferred to the buyer.
• Strategic Rationale: To sharpen focus on the globally-oriented "Taste Elevation" platforms.

This divestment allows Kraft Heinz to exit a narrowly defined segment, freeing capital and management attention for areas central to its future model. Despite the deal's closure, the stock price showed little movement on the final trading day of 2025, suggesting the market views it as a component of a larger narrative rather than a standalone catalyst.

Valuation, Yield, and Prevailing Doubts

Kraft Heinz shares closed 2025 at approximately $24.25, well below their 52-week high of over $30. While the stock has recovered somewhat from lows around $20.50, it continues to trade in the lower range of the past twelve months.

This depressed valuation results in an attractive dividend yield of roughly 6.6%—a standout figure in the consumer staples sector. For income-focused investors, this offers substantial compensation for the risks associated with the ongoing transformation. However, the share price also reflects significant market skepticism, trading at a notable discount to the valuation multiples of industry leaders like PepsiCo. Primary concerns center on weak operational performance and whether the company can regain sufficient pricing power in a cost-conscious consumer environment.

Analyst Sentiment Remains Cautious

The analyst community maintains a guarded stance. Firms including Piper Sandler and Stifel have reaffirmed their neutral "hold" ratings, with price targets in the $26 to $27 range. The consensus acknowledges the stock's fundamental undervaluation, but uncertainty surrounding operational improvement and the execution of the split has prevented more bullish upgrades.

As trading begins in 2026, attention turns to the new CEO's initial moves. Two factors will be decisive: stabilizing sales trends and ensuring the separation of Global Taste Elevation Co. and North American Grocery Co. proceeds on schedule. The details on structure and dividend policy expected in Q1 2026 will be a key focus, likely determining whether the market grants the Kraft Heinz turnaround story greater credibility.