Kraft Heinz Faces Major Shareholder Exodus as Berkshire Hathaway Exits

Kraft Heinz US5007541064

In a significant shift for one of America's iconic food companies, Kraft Heinz is losing its largest shareholder. Berkshire Hathaway, under the leadership of CEO Greg Abel, has initiated plans to divest its entire stake in the packaged food giant. The announcement, made public in regulatory filings on Thursday evening, triggered an immediate and sharp decline in the company's share price.

The disclosure sent Kraft Heinz shares tumbling to a multi-year low near $22 on Thursday. By Friday, the stock was trading around $22.40, reflecting a drop of 5% to 7% since the news broke and marking its weakest level in six years. Berkshire Hathaway's position comprises approximately 325 million shares, representing a 27.5% ownership stake. At the current market price, this holding is valued at roughly $7.7 billion.

For Warren Buffett's conglomerate, the exit will crystallize a substantial loss. The carrying value of the investment on Berkshire's books was last reported at $8.5 billion, well above its present market valuation. The investment has been a chronic underperformer, with Buffett himself having previously acknowledged overpaying. Berkshire was forced to take two major writedowns on the stake: one for $3.76 billion and a subsequent charge of $3.8 billion in August 2025.

Wall Street Analysts Downgrade Outlook

The planned divestment prompted several Wall Street firms to swiftly reassess their ratings on Kraft Heinz. Exane BNP Paribas took the most aggressive action on January 22, downgrading the stock from "Hold" to "Strong Sell" and slashing its price target to $22. The analysts cited the looming overhang of a massive share sale from Berkshire and stagnating organic growth as primary concerns.

Other institutions followed with downward revisions:
* JPMorgan adjusted its price target to $24, maintaining a "Neutral" stance.
* Jefferies reduced its target to $23.
* Bank of America Securities reaffirmed its "Sell" rating with a $25 target.

Interestingly, the options market displayed contrarian activity. On January 22, trading volume in call options surged, with over 72,000 contracts changing hands—a figure 158% above the daily average. This suggests some traders are positioning for a potential rebound or hedging around the stock's attractive dividend yield, which currently stands near 7%.

Strategic Split Loses Key Backer

The timing of Berkshire's departure is particularly consequential. Kraft Heinz is in the process of preparing a major corporate split scheduled for the second half of 2026. The plan is to separate into two publicly traded entities:
* Global Taste Elevation: A growth-oriented business focused on sauces and seasonings, with projected revenue of about $15.4 billion.
* North American Grocery: A cash-flow-stable but slower-growing portfolio of staple grocery products, with estimated revenue of $10.4 billion.

The exit of its most prominent investor, ahead of this complex transaction, signals a lack of confidence in the value-creation potential of the restructuring. CEO Steve Cahillane, who previously managed the breakup of Kellogg, will now oversee this pivotal strategic move without the backing of his largest shareholder.

Upcoming Earnings and Share Overhang

Attention now turns to the company's upcoming financial results. Kraft Heinz is scheduled to report fourth-quarter and full-year 2025 earnings on February 11, 2026. Market experts anticipate earnings per share between $2.50 and $2.57, slightly below earlier forecasts.

The dominant question for investors is whether the market can absorb the sale of 325 million shares without pushing the price below key support levels, potentially testing the $20 threshold. The prevailing analyst consensus remains at "Reduce" to "Hold," with the expectation that selling pressure from Berkshire's exit will persist in the near term.