3Q26 Preview — Setting Up for Another Quarterly Beat, As "Will They or Won't They" on 2027 EPS Growth Shifts into Focus

Kraft Heinz (KHC - Underweight) is scheduled to report 3Q26 earnings on Wednesday, November 4th. For 3Q, we model a $0.02 EPS beat (JPMe $0.44 EPS, vs. Consensus Metrix $0.42), aided by OSG upside (JPMe -1.4%, vs. CM -1.9%). Per Circana, measured US consumption accelerated ~50 basis points Q-Q to -1.9% Y/Y in 3Q, driven by better category level performance (market share slipped Q-Q). For 2026, we think KHC's OSG could be tracking toward the high end of its -2.5% to -0.5% annual range, but we are less confident about EPS tracking above the midpoint of KHC's $2.03-2.09 range, when considering mounting COGS inflation and the company's 2H-weighted spending plans (we model $2.05). The main risk item into earnings is that messaging on 2027 EPS could be incrementally cautious, given mounting COGS inflation. FY26 remains $2.05, and FY27 goes to $2.05 from $2.07. Our December 2027 price target goes to $23 from $24, mainly for lower multiples across the food group. We are Underweight the KHC sha