Morningstar

Berkshire Hathaway: Exiting Kraft Heinz Could Be First Move to Pare Down Equity Investment Portfolio

Berkshire’s reported cost basis for its stake in Kraft Heinz at the end of the third quarter of 2025 was above the stock’s trading value.

The Berkshire Hathaway Inc. is displayed on a smartphone screen.
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Securities in This Article
Berkshire Hathaway Inc Class B
(BRK.B)
The Kraft Heinz Co
(KHC)

Key Morningstar Metrics for Berkshire Hathaway

A Kraft Heinz KHC filing on Jan. 20 suggests Berkshire Hathaway BRK.B is selling all its holdings in the packaged foods firm. The 2015 combination of Kraft Foods and Heinz was one of the few investment missteps Warren Buffett has made in the past two decades.

Why it matters: Kraft Heinz has been a top 10 holding in Berkshire’s investment portfolio for much of the past decade, with the insurer having a 27% equity stake in the packaged foods firm.

  • Kraft Heinz has filed a Form 424(b)(7) disclosing that Berkshire is looking to sell “from time to time” up to 325,442,152 shares of its common stock. This excludes the 192,666 shares held by the retirement plans of Benjamin Moore, a Berkshire subsidiary.
  • Both Buffett and incoming Berkshire CEO Greg Abel have voiced their displeasure with Kraft Heinz’s move to split the company in two without a shareholder vote, so this move should come as no surprise. We also view the timing of this sale as reflecting Abel’s desire to clean up and pare down the firm’s investment portfolio early in his tenure.

The bottom line: We expect to keep our $765,000 ($510) per Class A (B) share fair value estimate in place following this news. We view the stock as slightly undervalued right now.

Key stats: Berkshire’s reported cost basis for its 27% stake in Kraft Heinz was $8.5 billion at the end of the third quarter of 2025, above the trading value of $7.7 billion.

  • Were Berkshire to arrange a large-scale secondary offering to unload its entire stake in Kraft Heinz, it would likely need to price it at a discount to the company’s current trading price.
  • While the shares have already sold off 6% overnight, we don’t envision Berkshire taking much less than $22 per share for its holdings (based on a 10% discount to an average trading price of $24.20 during the past 30 trading days), which would leave it with a realized loss of around $1.3 billion on its equity stake.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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