Kraft Heinz (KHC) Shares Tumble 1.34% to 2020 Low as Buffett Criticizes Split Execution Risks

The Kraft Heinz (KHC) share price fell to its lowest level since April 2020 on October 8, 2025, with an intraday decline of 1.85%. The stock closed the day down 1.34%, signaling renewed investor caution amid ongoing strategic uncertainty. This drop follows a broader selloff triggered by the company’s recent announcement to split into two independent entities, a move that has sparked mixed market reactions and raised questions about execution risks.

The split, unveiled in early September, aims to reverse the 2015 merger of Kraft Foods and Heinz by creating two publicly traded companies focused on distinct strategic priorities. While the plan is framed as a value-creation opportunity, analysts caution that the transition could cost up to $300 million in dis-synergies and disrupt operational efficiency. The immediate 7% drop in KHC’s stock price after the announcement highlighted investor skepticism about the feasibility of the strategy and potential short-term cash flow pressures.

Warren Buffett’s public criticism of the split has further amplified concerns. As the largest shareholder with a 27.5% stake, his disappointment underscores doubts about the long-term benefits of the move. Buffett, a longtime advocate of the 2015 merger, has signaled the decision may not align with the company’s historical value-creation goals. This sentiment has contributed to a broader sell-off, exacerbated by a weak September for the S&P 500 and shifting investor priorities toward high-growth sectors.

Valuation metrics suggest KHC remains significantly undervalued. A discounted cash flow analysis estimates the stock’s intrinsic value at $80.66 per share, a 67.7% discount to its current price. Meanwhile, its price-to-sales ratio of 1.22x lags behind industry peers, with analysts citing potential upside if each new entity trades at peer multiples. However, the lack of detailed operational plans for the split has left investors uncertain about how the separation will address underperformance in key markets, particularly the U.S. Away From Home segment.

Investor sentiment remains divided. While some analysts view the split as a long-term catalyst for innovation and market-specific growth, others warn of execution risks and operational inefficiencies during the transition. Institutional trading activity reflects this duality, with entities like Truvestments Capital LLC increasing holdings, while others, such as Caisse de Dépôt et Placement du Québec, have reduced stakes. The market’s cautious stance is further reflected in a consensus “Reduce” rating from major brokerages, underscoring uncertainty about the company’s ability to deliver on its strategic vision.

Looking ahead, the success of the split will hinge on effective execution and the ability to navigate macroeconomic headwinds, including elevated interest rates and shifting consumer behavior. While the stock’s current valuation metrics suggest potential, the path to unlocking value remains unproven. Investors will be closely watching for clarity on cost synergies, operational plans, and the broader impact of the separation on market dynamics. For now, KHC’s stock remains a high-risk, high-reward proposition, with its future trajectory dependent on the company’s ability to balance strategic ambition with operational execution.