By Sam Boughedda
Investing.com -- Shares of Kraft Heinz Co (NASDAQ:KHC) tumbled Thursday after a UBS analyst downgraded the stock to Sell from Neutral, trimming its price target to $34 per share from $40.
Analyst Cody Ross said they are downgrading the stock based on their industry trade down analysis report.
"KHC is contending with one of the highest inflationary pressures over the next 12 months, increasing their need to take another round of price this year, which we believe is unlikely in light of WMT's and TGT's commentary last week," wrote Ross.
He added that the company "has pulled back significantly on promotions, competes in categories with greater trade down risk, and has arguably the highest risk to consumer trade down to private label."
"If the company is not able to pass through pricing in 2H22, we
believe this would serve as a negative catalyst to the shares," Ross said.
Kraft Heinz shares are down 7.75% Thursday.