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More Reading from MarketBeat As Berkshire Exits Its Kraft Heinz Position, Is the Stock a Sell?Author: Jordan Chussler. Originally Published: 1/27/2026. 
Article Highlights - Newly entrenched Berkshire Hathaway CEO Greg Abel has decided to share the company’s 28% stake in consumer staples giant Kraft Heinz.
- The move comes after shares of KHC, which are down more than 3% year-to-date, lost 21% in 2025.
- Kraft Heinz has seen top-line contraction for eight consecutive quarters, resulting in analysts assigning the stock a consensus Reduce rating.
Last week, reports said newly instated Berkshire Hathaway (NYSE: BRK.B) CEO Greg Abel has begun the process of selling the company's nearly 28% stake—about 325 million shares—in consumer staples giant Kraft Heinz (NASDAQ: KHC). The move—less than a month after Abel succeeded Warren Buffett—follows KHC shares falling more than 3% to start the year, after a 2025 decline that exceeded 21%. AI is creating 1,600 new millionaires every single day. At the center of this frenzy sits Nvidia, now valued at $4.5 trillion. But most investors don't know Nvidia has three secret partners, smaller companies that play almost impossible-to-replicate roles in GPU development. Without them, Nvidia's business would be hamstrung. Because they're largely ignored, these companies trade at far more attractive valuations, giving you a way to capitalize on Nvidia's dominance without buying Nvidia itself. This is a pivotal moment for AI, but winning this trend requires playing smart, not reckless. See the full 2026 AI investment playbook and all three secret partners. For income investors who have relied on the company's high yield for years, does Berkshire's exit—ending its 10-year position—make Kraft Heinz an automatic sell? The Root of Kraft Heinz’s Issues From an earnings standpoint, KHC has generally met expectations; the last time it missed was Q4 2018. But meeting earnings does not necessarily mean the company is profitable. Although flanked by two profitable quarters in 2025, Kraft Heinz reported a Q2 loss exceeding $7.8 billion. That loss was largely driven by a $9.3 billion non-cash impairment charge, alongside falling sales driven by sticky inflation. The company—whose roots trace to 1869 (Heinz) and 1903 (Kraft)—has relied on aggressive cost-cutting for years, including the controversial zero-based budgeting strategy. A decade after the Kraft-Heinz merger, the food conglomerate is still wrestling with the debt it incurred in that deal. To put that challenge in context: as of Q3 2025, Kraft Heinz carried more than $19 billion in long-term debt, compared with a cash position of roughly $2.1 billion. At the same time, a weak labor market, shifting consumer confidence, and ongoing U.S. dollar devaluation have pushed cash-strapped consumers away from brand names and toward private-label (store brand) alternatives. Can KHC Reverse Course? In September 2025, Kraft Heinz announced plans to split into two scaled, focused independent companies. The division—tentatively named Global Taste Elevation Co. and North American Grocery Co.—is expected to be completed in the second half of 2026. Global Taste Elevation will concentrate on sauces and condiments, while North American Grocery will focus on meals and snacks, with the aim of creating more scalable, focused businesses. Critics—most notably Warren Buffett—have raised concerns, including objections that the split will not be subject to a shareholder vote. Over the long term, the two publicly traded companies could be better positioned to address challenges that have dogged Kraft Heinz since the merger. In the short term, however, a turnaround is not guaranteed. With full-year and Q4 2025 results due Feb. 11, it would not be surprising to see quarterly revenue contraction for a ninth straight quarter. The company reported a negative net margin of roughly 17.35%, indicating it is currently spending more than it earns. Its dividend payout ratio of nearly -43% suggests Kraft Heinz is not generating enough earnings to cover dividend payments, which increases the risk of future cuts. The dividend currently yields about 6.59% (roughly $1.60 per share annually), but given the payout ratio, income investors should be prepared for that yield to be reduced. What Wall Street Thinks About Kraft Heinz? Analyst sentiment is muted. Of 23 analysts covering the stock, one rates it a Buy, 17 rate it Hold and five rate it Sell—resulting in a consensus Reduce rating. The average 12-month price target is $26.16, implying roughly 11% potential upside from current levels. MarketBeat ranks KHC below one-third of the companies it evaluates and 73rd out of 149 stocks in the consumer staples sector. Compounding concerns, Tradesmith places Kraft Heinz's financial health in the Red Zone, where it has been for more than 19 months. Institutional ownership remains above 78%, although that figure is likely to fall once Berkshire Hathaway completes its sale. Short interest of about 4.37% suggests bearish traders are positioned for further downside. Bottom line: Berkshire's exit is a significant signal, but not necessarily an automatic sell for every investor. The company faces real near-term risks—high debt, negative margins, and an unsustainable dividend payout—that make it a risky income play today. Long-term investors who believe in the restructuring and are comfortable with the risks may find opportunity, but most income-focused investors should wait for clearer signs of sustained profitability, improved cash flow and dividend coverage before committing new capital.
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