Kraft Heinz Plummets 5% as Split Strategy Sparks Investor Doubt

Summary
• KHC trades at $24.24, down 5.02% from $25.52
• Intraday range: $24.11–$25.22 amid split announcement
• Buffett’s criticism and weak Q3 sales drive selloff

The Kraft Heinz (KHC) stock plunged 5% intraday on October 29, 2025, as investors grappled with the fallout from its controversial split plan and weak Q3 results. The stock’s sharp decline, from a $25.22 high to a $24.11 low, reflects growing skepticism about the company’s strategic direction. With Warren Buffett’s public disappointment and a 4.2% volume drop in North America, the market is testing the resilience of KHC’s long-term thesis.

Split Strategy and Buffett’s Disappointment Fuel Selloff
Kraft Heinz’s decision to split into two publicly traded entities—North American Grocery Co. and Global Taste Elevation Co.—triggered immediate volatility. The move, announced hours before the Q3 earnings report, was met with mixed reactions. While some analysts highlighted potential upside from peer multiples, Buffett’s public criticism of the split as a 'disappointment' amplified investor anxiety. Compounding the issue, Q3 results revealed a 4.2% volume contraction in North America, signaling waning consumer demand for staples. The stock’s 7% intraday drop on the split announcement, combined with broader market jitters, cemented the selloff.

Packaged Foods Sector Weighed by Consumer Discretion, PEP Trails
The Packaged Foods & Meat sector, led by Pepsico (PEP), mirrored KHC’s weakness, with PEP down 2.19% intraday. Sector-wide concerns over shifting consumer preferences and pricing pressures intensified after BrucePac’s listeria-linked recall of 10 million pounds of ready-to-eat meat. While KHC’s split aims to unlock value, peers like PEP face similar challenges in maintaining margins amid inflation and competition. The sector’s underperformance underscores a broader struggle to adapt to a post-pandemic retail landscape.

Bearish Setup: KHC20251107P24.5 and KHC20251107P24 Lead the Way
• MACD: -0.195 (bearish divergence from signal line -0.266)
• RSI: 59.17 (oversold territory near 50)
• Bollinger Bands: 24.77–26.17 (price near lower band)
• 200D MA: $27.93 (price 13% below)

KHC’s technicals paint a bearish picture, with price testing the 52W low of $24.11. Key support levels at $24.50 and $24.00 are critical for near-term stability. The options chain reveals two high-conviction plays: KHC20251107P24.5 and KHC20251107P24.

KHC20251107P24.5 (Put, $24.50 strike, Nov 7 expiry):
• IV: 22.64% (moderate)
• LVR: 49.56% (high leverage)
• Delta: -0.59 (sensitive to price drops)
• Theta: -0.046 (rapid time decay)
• Gamma: 0.426 (responsive to volatility)
• Turnover: 16,616 (liquid)
Under a 5% downside to $23.03, payoff is $1.47 per contract. This put thrives on a sharp break below $24.50, leveraging high gamma to amplify gains as the stock declines.

KHC20251107P24 (Put, $24 strike, Nov 7 expiry):
• IV: 25.83% (moderate)
• LVR: 83.74% (high leverage)
• Delta: -0.388 (moderate sensitivity)
• Theta: -0.0388 (moderate decay)
• Gamma: 0.368 (responsive)
• Turnover: 7,063 (liquid)
With a 5% downside, payoff is $0.97 per contract. This put offers a balance of leverage and liquidity, ideal for a medium-term bearish trade as KHC tests key support levels.

Aggressive bears should target KHC20251107P24.5 into a breakdown below $24.50.

Backtest The Kraft Heinz Stock Performance
Below is an interactive report of the requested back-test. Key assumptions that were automatically filled in (and why):• Price data granularity: Daily closes (intraday minute data was not available via the current data interface; using close-to-close moves is the closest proxy). • Plunge definition: any daily close that fell ≥ 5 % versus the previous day’s close. • Risk control: 10 % take-profit, 8 % stop-loss, maximum 10 holding days – chosen as common short-term swing-trade settings in academic event studies; feel free to ask for adjustments.You can inspect the full results, equity curve and statistics in the embedded module.Please explore the module for performance metrics such as cumulative return, hit-rate, average P/L per trade, maximum drawdown, and the equity curve. Let me know if you’d like to tweak any parameters or dive deeper into the event statistics.

KHC’s Split Strategy Faces Crucial Test—Watch $24.00 Support
Kraft Heinz’s split strategy hinges on reversing its North American volume slump and restoring investor confidence. With technicals pointing to a bearish bias and key support at $24.00, the next 72 hours will be pivotal. A close below $24.00 could accelerate the selloff, while a rebound above $25.00 might stabilize sentiment. Sector leader Pepsico (PEP), down 2.19%, highlights broader industry headwinds. Aggressive short-sellers should monitor the $24.00 level—breakdown confirms a deeper bearish trend.