Kraft Heinz Personnel Changes and Split Strategy Analysis: Valuation and Shareholder Return Prospects

Kraft Heinz announced on December 16, 2025, the appointment of Steve Cahillane as the new CEO, replacing Carlos Abrams-Rivera, effective January 1, 2026 [1]. Cahillane has extensive experience in the food industry, having served as CEO of Kellanova (formerly Kellogg) and successfully led Kellogg’s business separation [2]. He will also serve as CEO of the post-split “Global Taste Elevation Co.”, which will include brands such as Heinz Ketchup, Philadelphia Cream Cheese, and Kraft Macaroni [3].

Based on the latest data, Kraft Heinz faces severe difficulties [0]:

• Stock Price Performance
  : Down 20.10% year-to-date in 2025, down 20.62% over the past year
• Profitability
  : Earnings Per Share (EPS) of -$3.71, net profit margin of -17.35%
• Valuation Level
  : P/E ratio of -6.63x, indicating market concerns about its earnings prospects

The company has seen seven consecutive quarters of declining sales, with weak demand for core brands including Lunchables, Capri Sun, Macaroni, and Mayonnaise [1]. During Abrams-Rivera’s tenure, the company’s stock price fell about 34%, resulting in a negative return of approximately 27% for investors [1].

Kraft Heinz plans to complete the split in the second half of 2026, forming two independent public companies [4]:

1. Global Taste Elevation Co.
   • Core Brands
     : Heinz Ketchup, Philadelphia Cream Cheese, Kraft Macaroni
   • Market Size
     : Expected 2024 net sales of approximately $11.37 billion (accounting for 44% of total revenue)
   • EBITDA Margin
     : Target of 16.9%

2. North American Grocery Co.
   • Core Brands
     : Oscar Mayer, Kraft Singles, Lunchables
   • Market Position
     : North American grocery business
   • Goal
     : Focus on the local market and improve operational efficiency

• Improved Management Efficiency
  : Each company can focus on specific markets and product categories
• Optimized Resource Allocation
  : Avoid resource competition between brands and achieve precise investment
• Faster Decision-Making
  : Reduce organizational complexity

DCF analysis shows the current stock price is significantly undervalued [0]:

• Conservative Valuation
  : $79.88 (+225% upside)
• Base Valuation
  : $152.20 (+519% upside)
• Optimistic Valuation
  : $812.64 (+3206% upside)

• Debt Allocation
  : Reasonably distribute debt burden to improve each company’s capital structure
• Financing Capacity
  : Independent companies may obtain better financing terms
• Shareholder Returns
  : Enhance returns through dividend distribution or share repurchases

Steve Cahillane’s appointment provides important support for the split strategy [1, 2]:

1. Proven Success
   : Successfully led Kellogg’s separation and restructuring at Kellanova
2. Brand Expertise
   : Familiar with the operation of well-known brands such as Pringles, Cheez-It, and Pop-Tarts
3. Global Vision
   : Extensive global market experience, which helps the international development of Global Taste Elevation

From an industry perspective, the entire packaged food industry faces challenges [0]:

• Kraft Heinz
  : Down 20.62% over the past 12 months
• General Mills (GIS)
  : Down 28.18%
• Campbell Soup (CPB)
  : Down 32.60%
• Hormel Foods (HRL)
  : Down 26.42%
• SPY Index
  : Up 11.38%

After the split, the market may value the two companies separately, eliminating the “conglomerate discount”:

• Global Taste Elevation
  : Expected to receive a higher valuation multiple due to its global brand advantages
• North American Grocery
  : May benefit from stable cash flow and market position

• Cost Synergies
  : Expected to achieve approximately 10-15% cost savings
• Sales Growth
  : Focused strategy may drive 3-5% organic growth

Current financial status [0]:

• Liquidity Ratios
  : 1.13 (current ratio), 0.73 (quick ratio)
• Debt Risk
  : Low-risk category
• Free Cash Flow
  : $3.16 billion, healthy cash flow

1. Stock Price Reaction
   : Historical data shows similar splits usually generate positive reactions within 6-12 months after announcement
2. Distribution Benefits
   : May directly reward shareholders through stock distribution or special dividends
3. Transaction Costs
   : Split process may incur one-time costs, affecting short-term earnings

1. Value Reassessment
   : After independent operation, the market may re-evaluate their intrinsic value
2. Growth Potential
   : Focused strategy is expected to drive organic growth
3. Dividend Policy
   : Stable cash flow supports a sustainable dividend policy

1. Execution Risk
   : Complex split process may face operational disruptions
2. Market Risk
   : Packaged food industry faces structural pressures, including healthy food trends
3. Economic Risk
   : Macroeconomic environment may affect consumer spending

• Q1 2026
  : New CEO officially takes office and formulates detailed operational plans
• H2 2026
  : Complete the formal split and list the two companies independently
• 2027
  : Integration effects emerge and financial performance improves

Based on DCF analysis and split strategy value, expectations [0]:

• Target Price
  : $27.00 (analyst consensus, +9.8% upside)
• Potential Upside
  : May reach the $50-$80 range after successful split execution
• Timeframe
  : Value reassessment to be realized within 12-24 months

1. Existing Shareholders
   : Recommend holding and monitoring split execution progress
2. Potential Investors
   : May build positions in batches when the stock price pulls back to key support levels
3. Risk Management
   : Closely monitor sales trends and operational improvements

Kraft Heinz’s appointment of Steve Cahillane as CEO and promotion of the split strategy are important milestones for the company’s transformation. Combined with Cahillane’s extensive industry experience and successful split track record, this initiative is expected to significantly boost the company’s valuation and shareholder returns. Although facing industry challenges, the focused strategy and improved operational efficiency lay the foundation for long-term value reassessment. Investors should closely monitor split execution progress and performance improvements to seize potential investment opportunities.

[0] Gilin API Data - Including stock prices, financial indicators, DCF valuation, technical analysis, and company overview
[1] Invezz - “Kraft Heinz names Steve Cahillane CEO: his plans to fix growth and execute breakup” (https://invezz.com/news/2025/12/16/kraft-heinz-names-steve-cahillane-ceo-his-plans-to-fix-growth-and-execute-breakup/)
[2] Just-Food - “Kraft Heinz hires ex-Kellanova chief as new CEO” (https://www.just-food.com/news/kraft-heinz-hires-ex-kellanova-chief-as-new-ceo/)
[3] Fox Business - “Kraft Heinz names new CEO ahead of major split” (https://www.foxbusiness.com/lifestyle/kraft-heinz-names-new-ceo-ahead-major-split)
[4] Wall Street Journal - “Kraft Heinz Picks New CEO Ahead of Split” (https://www.wsj.com/business/retail/kraft-heinz-picks-new-ceo-ahead-of-split-028734ca)