New York CNN Business  — 

Kraft Heinz was crushed like an overripe tomato Thursday after Goldman Sachs cut its rating on the struggling food company to a “sell,” citing concerns about a “persistent” decline in profit.

Shares of Kraft Heinz (KHC)fell more than 6% following the downgrade. It was the second-worst performer in the S&P 500, trailing only tech giant Cisco Systems (CSCO), which tumbled 7% after issuing a weak outlook after the closing bell Wednesday.

Kraft Heinz, which named Anheuser-Busch InBev (BUD) veteran Miguel Patricio as its new CEO earlier this year, had rallied lately following its last earnings report at the end of October. Wall Street seemed excited by the fact that profit topped forecasts, even though sales continued to fall.

But Goldman Sachs analyst Jason English argued in his report Thursday that the 15% spike since that release was overdone. English has a price target of $29 on Kraft Heinz. Shares were trading just below $31 on Thursday.

English added that Kraft Heinz may take a short-term hit if it sells some brands that the company feels might be “too expensive to turn around.” And he said that the company, which already slashed its dividend by 36% earlier this year, may need to cut it again to shore up cash. English is now one of five Wall Street analysts who have Kraft Heinz rated a “sell.”

Kraft Heinz is down nearly 30% in 2019, making it one of the worst-performing stocks in the S&P 500 this year.

Turnaround in question

The company has faced a host of challenges that Patricio is trying to address, including accounting issues, a stale product lineup after years of cost cutting and challenges from other food companies who have latched on to hot trends like plant-based proteins and organic food.

Kraft Heinz was forced to delay the release of some of its financial results earlier this year because of an internal investigation of its accounting practices as a result of a probe by the Securities and Exchange Commission.

The company has also been much slower than many of its other traditional rivals to branch out into newer categories to address the booming demand for fake meat and other health food items.

General Mills (GIS) bought organic mac and cheese maker Annie’s in 2014. Hershey (HSY) acquired SkinnyPop maker Amplify Snack Brands in 2017 and also bought the maker of Pirate’s Booty from B&G Foods last year. And ConAgra (CAG) scooped up Pinnacle, owner of Smart Balance and the Udi’s brand of gluten free food last year.

The rise of Amazon (AMZN) and Walmart (WMT) in the grocery business isn’t helping either. Those two retailers, along with Target (TGT), have put significant pressure on food companies to lower prices. That has hurt profit margins for Kraft Heinz.

And Goldman’s English sees no end in sight.

“The company has under-invested in multiple areas and now faces renewed cost pressure in dairy, and potentially protein next year. We see little opportunity for new net-cost savings,” he said in Thursday’s report.

Problems bruise Buffett and 3G too

The problems at Kraft Heinz have been a notable black eye for the company’s top two investors – Warren Buffett’s Berkshire Hathaway (BRKB) and private equity firm 3G Capital. Berkshire and 3G teamed up in 2013 to buy Heinz and they followed that deal up with the Kraft merger in 2015.

Berkshire owns nearly 27% of Kraft Heinz and Buffett said earlier this year that Berkshire and 3G overpaid for Kraft. Berkshire has since written down a big chunk of its investment in the company but Kraft Heinz is still Berkshire’s sixth-largest holding.

3G has taken a hit on its Kraft stake too. 3G sold more than 25 million Kraft Heinz shares earlier this year. Kraft Heinz told CNN Business at the time that the sale was “driven by periodic liquidity windows by 3G investors in the 3G fund that holds Kraft Heinz stock.”

“3G remains a committed long-term owner of the company and has no current plan or intention to sell any additional shares,” a Kraft Heinz spokesman told CNN Business, adding that 3G co-founder and Kraft Heinz board member Jorge Paulo Lemann personally bought more shares.

Lemann said at the time that he bought more stock in Kraft Heinz “because I believe in its potential for a turnaround, and plan to hold this investment for the long run.”

But Goldman Sachs clearly disagrees.