There is a growing rift between shares of
and those of
Kraft shares may have jumped 1.5% on Tuesday but they have fallen 26% this year, while Coca-Cola has soared almost 15% so far this year and closed at a record Tuesday.
Analysts aren’t expecting Kraft’s move higher to last. Few of them polled on FactSet have a “buy” rating on the company, and several have revised their outlooks lower. Meanwhile, the forward price/earnings ratio for the food giant has fallen, FactSet data show.
Investors soured on Kraft as it was tied up with an internal investigation into accounting irregularities in its procurement division that the company revealed in February. It also disclosed poor earnings results previously. Kraft is trading well below its 52-week high of $64.99, FactSet data show. It closed Tuesday at $31.95.
A spokesman for Kraft said in an email that Kraft Heinz is “returning to a path of normalization” with the appointment of a new chief executive officer and a closure of its internal investigation.
Meanwhile, investors are more optimistic about Coca-Cola, which has seen its forward price/earnings ratio rise recently as it has rolled out a new soda flavor and bought British coffee-shop chain Costa. It was the best-performing consumer-staples stock on Tuesday. The beverage giant rose 6.1% Tuesday to $54.33 as its namesake soft drinks and the introduction of coffee, energy and other products gave it a boost in sales in its latest earnings results.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
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