Kraft Heinz Stock Slapped With Bear Note

KHC has encountered stiff resistance at its 60-day trendline

Managing Editor
Feb 5, 2019 at 9:41 AM
facebook twitter linkedin

The shares of Kraft Heinz Co (NASDAQ:KHC) are 0.4% lower to trade at $47.53 this morning, after Deutsche Bank downgraded the food concern to "hold" from "buy," while trimming its price target to $52 from $58. The analyst in coverage noted that increased efforts from store brands have taken a share of Kraft Heinz's major categories. 

Kraft Heinz stock stumbled to close out 2018, falling to a record low of $41.60 on Dec. 26. While the shares rallied 11.7% in January, the momentum appears to have stalled at their 60-day moving average. This trendline has kept a lid on breakouts since early August. 

There is certainly room for more bear notes. More than half of the 13 brokerages in coverage of KHC rate it a "strong buy," and the stock's consensus 12-month price target of $56.05 is an 18.1% premium to last night's closing perch of $47.73. 

In the options pits, the mood is almost exclusively bearish. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 3.19 ranks in the 100th percentile of its annual range, meaning puts have been bought to open at a near-climactic pace relative to calls in the last two weeks.

The good news for options traders is that the stock's Schaeffer's Volatility Scorecard (SVS) sits at 86 out of a possible 100, meaning KHC has handily exceeded options traders' volatility expectations in the past year -- a boon for would-be premium buyers.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners