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Kraft Heinz (KHC) is drawing fresh attention as its February 11 earnings date approaches. Analysts expect declines in earnings per share and revenue, there is heavier call option activity, and the company has announced a planned sauces and grocery split later this year.
See our latest analysis for Kraft Heinz.
At a share price of US$24.48, Kraft Heinz has seen short term momentum pick up, with a 7 day share price return of 5.56% and a 90 day gain of 3.20%. The 1 year total shareholder return of 9.32% and 3 year total shareholder return of 27.24% indicate that longer term holders have faced more pressure even as attention builds around the planned business split and recent product launches like HEINZ KegChup.
If you are looking beyond packaged foods for your next idea, this could be a useful moment to broaden your watchlist with fast growing stocks with high insider ownership.
With Kraft Heinz trading at US$24.48 and an indicated discount to one analyst price target, plus a wide gap to one intrinsic estimate, the real question is whether there is genuine value here or if the market is already pricing in future growth.
The most followed narrative estimates Kraft Heinz’s fair value at $27.13 compared with the last close at $24.48, framing the current setup as a discount with conditions attached.
Ongoing portfolio optimization divesting non core brands and reinvesting into high margin segments and key power brands should lead to structurally higher operating margins and improved profitability in future periods.
Curious what would need to change for that higher value to be reasonable? Revenue, earnings, and margins would all need to move together in a very specific way. The narrative outlines those potential shifts in detail.
Result: Fair Value of $27.13 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, there are pressure points to watch, including weaker North America volumes and industry headwinds that could keep margins and earnings under strain for longer than expected.
Find out about the key risks to this Kraft Heinz narrative.
So far, the story leans on fair value estimates that suggest Kraft Heinz is trading at a discount. Yet on simple sales-based pricing, the picture is not as clear cut. KHC trades on a P/S ratio of 1.2x, which is higher than the US Food industry at 0.8x.
