Kraft Heinz: The Only Large-Cap Food Company Where Goldman Sees Revenue Upside

Goldman Sachs reiterated its Buy rating on Kraft Heinz Co KHC saying it's the only large-cap food company where it sees revenue upside.

"All in, we see a path to 3%-plus organic sales growth, though only 2% would beat the Street. We reiterate our Buy (on CL) on more than just costs and M&A," analyst Jason English wrote in a note.

Following are the key topline drivers, according to English:

• 1. "Cost deflation is abating and consensus is accounting for the fading margin tailwind without giving credit to the associated topline relief."
• 2. "More "big bet" innovation is on the come. The most recent push – Heinz barbecue sauces – drove a share, sales and price tier inflection. Similar success on only half of its initiatives would matter."

Related Link: Deutsche: Good Things Come To Those Who Don't Wait To Buy Heinz

• 3. "Revenue management can be powerful. We delve into dry dinners where the approach appears to have been applied. The result is better net-price and a profitable sales inflection for both KHC and the category. Deployment across its top 30 categories begins in 2017."
• 4. "Whitespace expansion abroad is just beginning as Kraft brands are deployed on Heinz's infrastructure. We detail a narrow basket of category/country combinations and see 1-3% annual growth upside."

English has a $100 price target on the stock, which is currently up 0.24 percent to $89.56.