Shares of food and beverage major The Kraft Heinz Company (NASDAQ:KHC) are on the rise today after its board of directors approved a share repurchase program worth up to $3 billion.
The duration of the buyback is until December 26, 2026, and the company plans to repurchase the shares with excess cash after allocations. Notably, the announcement comes after Kraft Heinz achieved its targeted net leverage ratio of 3x in the third quarter.
Miguel Patricio, the Chair and CEO of KHC, noted, “A stronger balance sheet, along with advancements we have made across the business, gives us further conviction behind our strategy and the belief that company shares are an attractive investment opportunity.”
Further, the new program will be in addition to the share repurchases that Kraft Heinz has been using to offset the dilutive effect of equity-based compensation.
Shares of the company have gained nearly 11% over the past month.
Is KHC a Buy, Sell, or a Hold?
Overall, the Street has a Moderate Buy consensus rating on Kraft Heinz, and the average KHC price target of $36.65 implies a modest 3.8% potential upside in the stock.
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