NEW YORK — Citing among other things “a challenged portfolio,” Credit Suisse has downgraded its rating on The Kraft Heinz Co. to “underperform” from “outperform,” and lowered its target price to $55 from $77.

In the report prepared by Robert Moskow, research analyst, two key concerns were highlighted: the lack of an innovative culture and vulnerable brands in commoditized categories.

“The new leadership at Kraft Heinz talks a lot about the importance of growth, but we don’t see evidence of significant product innovation coming out of the business,” Mr. Moskow said. “Aside from Devour frozen meals and Heinz mustard, we can’t think of any ‘Big Bet’ new product introductions that generated meaningful sales. The February presentation pointed to an internal target for generating innovation at a rate of 7% of net sales. In comparison, innovation at Kraft Foods under the prior c.e.o. averaged 9% to 10%. The decline might be a casualty of extreme cost-cutting.”

Mr. Moskow said that while Kraft Heinz has taken steps to clean up its ingredients, modify flavor profiles and improve packaging, it has fallen flat on the innovation front. Many of the so-called innovation efforts actually have been more like renovation efforts, he said.

“Competing companies like Danone, General Mills and Coca Cola are working hard to catch up to consumer demand for organic, gluten-free, plant proteins and prebiotics,” he explained. “In comparison, Kraft Heinz has lagged its peers in delivering strong, revolutionary innovations with a material impact. It launched Heinz mustard in 2015, but the product remains a negligible component at just 0.1% in F.Y. 18 company sales when measured on an annualized basis. In comparison, innovative products such as Yoplait Oui and Well Yes! comprise 0.7% of their respective companies’ F.Y. 18 sales.”

Another challenge facing Kraft Heinz is the fact that approximately 44% of its U.S. retail portfolio competes in cheese, meats, coffee and nuts, categories where the underlying commodity dictates the price, Mr. Moskow said.

“We believe the lack of sufficient product innovation and promotional support in these categories contributed to the retailers’ decisions to expand their private label programs,” he said. “Without sufficient innovation, the Kraft brands tend to lose their ability to maintain a premium price to private label.”