It's Time For a Deep Dive Into The Kraft Heinz Company (KHC)

Now trading at a price of $40.71, The Kraft Heinz Company has moved 0.1% so far today on a volume of 4,344,843, compared to its average of 6,890,973. In contrast, the S&P 500 index moved -0.3%.

The Kraft Heinz Company shares moved 12.6% over the last 52 weeks, with a high of $44.87 and a low of $32.73. During this time, the stock underperformed the S&P 500 index by 32.6%. As of January 2022, the company's 50-day average price is $39.0. The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. The large-cap Consumer Defensive company has 36,000 full time employees and is based in Pittsburgh, PA. The Kraft Heinz Company has returned a 3.9% dividend yield over the last 12 months.

An Exceptional EPS Growth with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $24,977 $26,185 $26,042
Revenue Growth n/a 4.84% -0.55%
Gross Margins 32.6% 35.0% 33.3%
Gross Margins Growth n/a 7.36% -4.86%
Operating Margins 19.9% 21.1% 19.6%
Operating Margins Growth n/a 6.03% -7.11%
Earnings Per Share $1.58 $0.29 $0.82
EPS Growth n/a -81.65% 182.76%
Free Cash Flow (MM) $2,784 $4,333 $4,459
FCF Growth n/a 55.64% 2.91%
Capital Expenditures (MM) -$768 -$596 -$905
Net Debt / EBITDA 3.9 3.66 2.94

The Kraft Heinz Company Is Overvalued:

Compared to the Consumer Defensive sector's average of 24.21, The Kraft Heinz Company has a trailing twelve month price to earnings (P/E) ratio of 41.5 and, based on its EPS guidance of 2.75, an expected P/E ratio of 14.8.

The firm's price to earnings growth (PEG) is -12.73, which tells us that the company is expected to have negative growth in the future.

The Kraft Heinz Company is undervalued in terms of its assets because its price to book (P/B) ratio is 1.0 compared to its sector average of 4.09. The company's shares are currently trading 44.4% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 0.9 * 39.24) = $28.19

The Kraft Heinz Company Is the Subject of Mixed Market Indicators:

21 analysts are following The Kraft Heinz Company and have set target prices ranging from $36 to $49 per share. On average, they have given the company a rating of hold. At the current price of $40.71, KHC is trading -3.99% away from its average analyst target price of $42.4 per share, implying an analyst consensus of some upside potential for the stock.

The company has a very low short interest since 1.9% of the company's shares are tied to short positions. Institutions own 79.9% of The Kraft Heinz Company's shares, while the insider ownership rate stands at 1.67%. The biggest shareholder is Berkshire Hathaway, Inc with a 27% stake in the company worth approximately $13,256,593,142.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.