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Fly News Breaks for February 17, 2020
KHC
Feb 17, 2020 | 13:05 EDT
Stifel analyst Christopher Growe says Kraft Heinz's two debt downgrades to junk on Friday, by S&P Global and Fitch, secures the company as non-investment grade and will lead to a higher cost of borrowing in the future. The downgrades follow Kraft's decision to prioritize its dividend over an investment grade credit rating, Growe tells investors in a research note. In the short-run, the analyst sees no real effect on the business, its debt costs, or its availability of capital. However, Growe sees two issues here - Kraft Heinz's desire to get back to acquisitions in the future and its ability to regain an investment grade credit rating. He worries regaining investment grade could be a multi-year year endeavor and keeps a Hold rating on the shares with a $30 price target.