He also increased his price target to $38 from $28.
Baumgartner wrote in a report that he likes "food stories with a low bar," the Fly reports. And Kraft Heinz certainly lives up to that billing.
The stock has dropped 63% over the past five years and 10% over the past three months. Kraft Heinz stock recently traded at $28.53, up 1.7%.
Analysts complain that under 3G’s direction the company simply cut costs rather than trying to revitalize. Kraft Heinz brands were seen as old and tired.
But Baumgartner says the company’s mix of brands isn’t as "off-trend" as the stock’s bears contend.
Much of Kraft Heinz’s revenue comes from the top 20% of income-earning households and from consumers aged 34 and under, he said.
The company’s internal savings can finance reinvestment, and it has new growth initiatives in U.S. categories, Baumgartner said.
Kraft Heinz posted a 6% increase in organic sales during the first quarter, as the coronavirus was beginning to rage.
But Morningstar analyst Erin Lash wrote in a report last week that she didn't think "this growth will prove sustainable, as consumers ultimately destock their pantries over time.
“Further, we don’t expect the competitive intensity that has characterized the industry (from other branded operators, lower-priced private-label fare, and small, niche operators) is poised to fade.”