Ahead of the Bell: Analyst cuts Heinz to 'Hold'

Deutsche Bank analyst Eric Katzman cut his rating on the stock to "Hold" from "Buy," saying he's concerned about economic weakness in France, Holland, Italy and the U.K.

"To date the U.K. market is holding up for packaged food but we recall not that long ago Heinz suffered with a tough U.K. marketplace," Katzman wrote in a client note.

Katzman said Heinz has "significant" exposure to Europe, where many consumers are struggling.

Katzman also said heightened competition from companies like France's Carrefour SA may hurt Heinz in the second half of fiscal 2009 and fiscal 2010.

Looking at emerging markets, Katzman said countries like Indonesia, Russia and India have posted strong results, but a near-term slowdown is still likely, as some middle-class consumers may fall back to lower-income levels.

In the U.S., Katzman said new products and higher prices are helping results, but commodity costs are rising.

Katzman lowered his price target by $3 to $53, which implies upside of 20.5 percent to Thursday's closing price of $43.15.