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As Berkshire Exits Its Kraft Heinz Position, Is the Stock a Sell?

Written by Jordan Chussler

Last week, it was reported that newly instated Berkshire Hathaway (NYSE: BRK.B) CEO Greg Abel has initiated the process to sell the company’s nearly 28% stake—or approximately 325 million shares—in consumer staples giant Kraft Heinz (NASDAQ: KHC).

The move, which occurred less than one month after Abel took the reins from predecessor Warren Buffett, comes in the wake of KHC shares kicking off the year by losing more than 3%, following a 2025 performance that saw the stock slide by more than 21%. 

But for income investors whose dividend portfolios have relied on the company’s strong yield for years, does Berkshire’s move—which marks the end of its 10-year position—make Kraft Heinz an automatic sell? 

The Root of Kraft Heinz’s Issues

Strictly from an earnings perspective, KHC shares have delivered on paper. The last time the company missed earnings expectations was Q4 of 2018. But earnings—in and of themselves—do not equate to profitability. 

While bookended by two quarters of profitability in 2025, last Q2 Kraft Heinz posted an enormous loss of more than $7.8 billion. This loss was tied to a $9.3 billion non-cash impairment charge, in addition to falling sales fueled by sticky inflation.

The company, whose roots date back to 1869 (Heinz) and 1903 (Kraft), has leaned on aggressive cost-cutting measures for years, including the controversial zero-based budgeting strategy. A decade after the Kraft-Heinz merger, the food conglomerate is still struggling to get out from under the debt it incurred in that deal.

To put that challenge into perspective, as of Q3 2025, it was carrying more than $19 billion in long-term debt, which easily surpassed its cash position of $2.1 billion.

At the same time, a weak labor market, shifting consumer confidence, and ongoing U.S. dollar devaluation have forced cash-strapped consumers to turn away from brand names and toward private-label (a.k.a. store brand) alternatives.  

Can KHC Reverse Course? 

In September 2025, Kraft Heinz announced that it will be splitting into two scaled, focused independent companies. That division into two entities—tentatively named Global Taste Elevation Co. and North American Grocery Co.—will be finalized in the second half of 2026. 

The plan is to divide the company into scalable businesses with separate focuses. Global Taste Elevation will focus on sauces and condiments, while North American Grocery will focus on meals and snacks. 

But the plan is not without its critics, chief among them Warren Buffett, who expressed disapproval, particularly in light of the company’s split not being subject to a shareholder vote. 

Long term, the two companies—both of which will be publicly traded under different tickers—may see relief from the problems that have been plaguing Kraft Heinz since its mega-merger 10 years ago. But in the short term, there is little reason to believe a turnaround is imminent. 

While the consumer staples firm does not report its full-year and Q4 2025 earnings until Feb. 11, it wouldn’t be unexpected to see quarterly revenue contraction for the ninth consecutive quarter. That has contributed to a negative net margin of 17.35%, indicating that Kraft Heinz is currently spending more than it earns.

Meanwhile, its dividend payout ratio of nearly -43% demonstrates that the company is not generating enough earnings to cover its dividend payments, which could lead to future cuts. Currently, Kraft Heinz’s dividend yields an attractive 6.59%, or $1.60 per share annually. But given its payout ratio, income investors should be prepared for that yield to be reduced. 

What Wall Street Thinks About Kraft Heinz? 

Sentiment on Kraft Heinz is tepid at best. Of the 23 analysts currently covering the stock, only one assigns it a Buy rating, with 17 assigning it a Hold, and five assigning it a Sell. Overall, KHC receives a consensus Reduce rating. 

The average 12-month price target for shares of Kraft Heinz is $26.16, or just more than 11% potential upside from where the stock is changing hands today. The company scores lower than one-third of the companies evaluated by MarketBeat, and ranks 73rd out of 149 stocks in the consumer staples sector. Compounding matters, Kraft Heinz’s financial health falls into the Red Zone, according to Tradesmith, where it has been for more than 19 months. 

Institutional ownership remains strong at more than 78%, but that figure is likely to drop once Berkshire Hathaway completes its sale of KHC shares. Current short interest of 4.37% suggests that Wall Street’s bears are keeping an eye on Kraft Heinz in the anticipation of more potential downside in the year ahead.  READ THIS STORY ONLINE

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Analysts Remain Steadfast on Rocket Lab After Neutron Test Failure

Written by Ryan Hasson

Shares of Rocket Lab (NASDAQ: RKLB) have pulled back sharply over the past week, closing Monday, Jan. 26, nearly 20% below its recent all-time high. The sell-off came despite continued momentum across the aerospace and defense sector and a recent successful Electron mission.

As MarketBeat has noted repeatedly, Rocket Lab’s long-term valuationhinges heavily on the successful development of its medium-lift Neutron rocket. Neutron represents a step-change opportunity for the company, opening the door to larger payloads, higher-margin missions, and deeper exposure to defense and national security contracts. Unsurprisingly, any headline tied to Neutron tends to move the stock aggressively.

That dynamic was on full display on Jan. 21, when Rocket Lab disclosed that a Stage 1 tank ruptured during qualification testing at its Long Beach, California, facility. The market’s initial reaction was fear and panic, and the stock dropped more than 10% in after-hours trading. Days following that event, the stock has failed to hold a bounce, selling off significantly from recent highs. 

The news and recent price action have likely left some investors wondering whether it is overblown, fundamentally altering, or just routine testing.

A Routine Setback in Neutron’s Development

According to Rocket Lab, the rupture occurred during a hydrostatic pressure test, part of the qualification process designed to push structures beyond their intended operational limits. Notably, the company emphasized that such failures are not uncommon during development testing and are a deliberate part of validating safety margins.

Rocket Lab noted that no damage occurred to surrounding facilities and that the next Stage 1 tank is already in production. Neutron’s development program remains active and ongoing.

What investors are watching most closely now is whether the incident results in another delay to Neutron’s maiden flight, currently targeted for the first half of 2026. Rocket Lab did not provide an immediate update on timing, stating instead that it will assess the impact and deliver a schedule update during its fourth-quarter 2025 earnings call in February.

For a stock trading near record highs, the absence of near-term clarity was enough to spook momentum-driven investors, at least temporarily.

Progress Continues as Key Hardware Arrives

While headlines focused on the testing failure, Rocket Lab simultaneously made progress elsewhere in the Neutron program. The company confirmed that its Hungry Hippo fairing, which has already cleared qualification testing, recently arrived at the Virginia launch site for the Neutron Rocket.

Engineers will complete inspections in the coming days before preparing the fairing for additional pre-launch testing at Rocket Lab Launch Complex 3. The delivery of the fairing underscores an important point: development is moving forward on multiple fronts, even as individual components go through expected testing hurdles.

Analysts Largely Unfazed by the Sell-Off

Wall Street’s reaction has been notably calmer than the market’s initial response. Several analysts characterized the test failure as routine and necessary within the context of launch vehicle development.

Bank of America reiterated its Buy rating on Rocket Lab, expressing continued confidence in Neutron’s long-term prospects. The analysts at BAC also raised their price target to $120 from $60. TD Cowen made a similar move. On Jan. 22, the firm maintained its Buy rating on RKLB and raised its price target to $100 from $60, noting that the event was standard qualification testing rather than a fundamental setback. The analyst also highlighted that no facility damage occurred and that replacement hardware is already in production.

Taken together, the pullback appears driven less by any deterioration in Rocket Lab’s long-term thesis and more by short-term uncertainty tied to a headline-sensitive Neutron update.

With the stock up roughly 1,580% over the past three years, bursts of profit-taking following negative or ambiguous headlines are not unusual, particularly when they involve the company’s most critical growth catalyst. But overall, as Neutron’s development continues, and key hardware arrives on site, the recent sell-off may ultimately prove to be more noise than signal. READ THIS STORY ONLINE

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Freeport-McMoRan: What the Future Could Hold After a 70% Rebound

Written by Leo Miller

After disaster struck copper mining giant Freeport-McMoRan (NYSE: FCX) in September of 2025, the stock has gone on a massive rally. The company significantly lowered its guidance on September 25, 2025, after assessing the impact of a mudslide at its Grasberg mine in Indonesia. This caused shares to tank approximately 22% in two days. Since MarketBeat highlighted the potential in FCX after this fall, shares are up approximately 72% as of the Jan. 26 close.

However, with such a strong run-up in shares, it’s worth reassessing the potential in Freeport-McMoRan stock going forward. The company’s latest earnings and copper price projections are key factors to consider.

Freeport Falls Despite Strong Beats on Sales and EPS

Freeport released its Q4 and full-year 2025 earnings on Jan. 22. Revenue came in at $5.63 billion, a decline of 1.5% versus a year ago. Despite this, the figure exceeded estimates of $5.42 billion, which called for a drop of 5.2%. While production fell greatly due to the Grasberg disruption, soaring copper and gold prices helped keep the company’s revenues stable. Freeport also delivered impressive adjusted earnings per share (EPS) of 47 cents, much higher than the 28-cent consensus forecast. The figure increased 52% from a year ago.

Looking further into 2026, Freeport expects to sell 3.4 billion pounds of copper, moderately less than the 3.6 billion pounds sold in 2025. It also sees gold sales at 800,000 ounces, down from 1.07 million ounces in 2025. By 2028, Freeport sees a significant increase in sales versus 2025 levels, forecasting 4.2 billion pounds of copper and 1.3 million ounces of gold. The reopening of Freeport’s Grasberg mine will help make this rebound possible. The company expects to restore 85% of Grasberg’s production capacity in the second half of 2026. The company will restore the significant majority of its Grasberg capacity over the next year, indicating solid execution on its reopening plans so far.

Despite this strong report, Freeport shares dropped approximately 2.9% on the day of the results. This reaction may simply reflect the large rally that had already taken place in the stock, with the market pricing in these results.

Copper Forecasters Are Bearish Near-Term, Bullish Over the Next +10 Years

The huge increase in copper and gold prices has been one of the main factors aiding Freeport’s rise. Since Sept. 25, 2025, per-pound copper futures are up around 25%, and per-ounce gold futures are up around 34%. The prices of both metals are at or very near their all-time highs. Going forward, movements in these metals will continue to have a huge impact on Freeport shares.

The company is highly leveraged to copper prices, noting that a 10-cent change translates to an approximately $335 million move in its operating cash flow. For reference, copper futures sit near $5.90 per pound. The company projects that $4 copper would lead to an operating cash flow of $8 billion, while $6 copper would lead to an operating cash flow of $14 billion in 2026. This is a huge gap, making copper price forecasts essential to evaluating Freeport’s outlook.

Analysts have mixed projections. Goldman Sachs Research estimates that copper’s fair value is around $11,500 per metric ton. Note that Goldman quotes copper prices in metric tons rather than pounds. That is around 12% below recent prices above $13,000. Goldman bases this forecast on the assumption that the U.S. government will put tariffs on copper. This would “signal an end” to U.S. stockpiling of the metal, which has helped push prices up. Analysts recently interviewed by S&P Global also echo this sentiment.

On the other hand, S&P put out a recent report suggesting that copper supply will fall 25% below demand by 2040. While S&P does not provide a copper price forecast, this dynamic could put significant upward pressure on copper prices long-term. Notably, Goldman is also bullish over an extended period. It sees copper prices hitting $15,000 per metric ton by 2035.

FCX’s Rise Warrants Caution Going Forward

Freeport has gone on an extremely strong run recently. However, copper forecasts indicate that its rally could come under pressure in the near term. Still, the long-term outlook appears constructive. The MarketBeat consensus price target on Freeport, near $57.60, implies 6% downside in shares. Targets updated after the company’s earnings release average $64.60, implying around 6% upside. READ THIS STORY ONLINE

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