Now trading at a price of $32.64, Kraft Heinz has moved 0.3% so far today.
Kraft Heinz returned losses of -11.0% last year, with its stock price reaching a high of $42.8 and a low of $32.42. Over the same period, the stock underperformed the S&P 500 index by -25.0%. As of April 2023, the company's 50-day average price was $34.94. 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. Based in Pittsburgh, PA, the large-cap Consumer Staples company has 37,000 full time employees. Kraft Heinz has offered a 4.9% dividend yield over the last 12 months.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2018-02-16 | 2019-06-07 | 2020-02-14 | 2021-02-17 | 2022-02-17 | 2023-02-16 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $26,076 | $26,268 | $24,977 | $26,185 | $26,042 | $26,485 |
| Gross Margins | 35.0% | 34.0% | 33.0% | 35.0% | 33.0% | 31.0% |
| Operating Margins | 23% | 22% | 20% | 21% | 20% | 17% |
| Net Margins | 42.0% | -39.0% | 8.0% | 1.0% | 4.0% | 9.0% |
| Net Income (MM) | $10,941 | -$10,192 | $1,935 | $356 | $1,012 | $2,363 |
| Net Interest Expense (MM) | -$1,234 | -$1,284 | -$1,361 | -$1,394 | -$2,047 | -$921 |
| Depreciation & Amort. (MM) | -$1,031 | -$983 | -$994 | -$969 | -$910 | -$933 |
| Earnings Per Share | $8.91 | -$8.36 | $1.58 | $0.29 | $0.82 | $1.91 |
| EPS Growth | n/a | -193.83% | 118.9% | -81.65% | 182.76% | 132.93% |
| Diluted Shares (MM) | 1,228 | 1,219 | 1,224 | 1,228 | 1,236 | 1,236 |
| Free Cash Flow (MM) | $1,695 | $3,400 | $4,320 | $5,525 | $6,269 | $3,385 |
| Capital Expenditures (MM) | -$1,194 | -$826 | -$768 | -$596 | -$905 | -$916 |
| Net Current Assets (MM) | -$46,815 | -$42,608 | -$41,604 | -$38,765 | -$34,948 | -$33,746 |
| Long Term Debt (MM) | $28,308 | $30,770 | $28,216 | $28,070 | $21,061 | $19,233 |
| Net Debt / EBITDA | 4.19 | 4.47 | 4.52 | 3.83 | 3.06 | 3.47 |
The Market May Be Undervaluing Kraft Heinz's Assets and Equity:
Kraft Heinz has a trailing twelve month P/E ratio of 13.6, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $2.98, the company has a forward P/E ratio of 11.7. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -18.8%. On this basis, the company's PEG ratio is -0.73, which indicates that its shares are overpriced. In contrast, the market is likely undervaluing Kraft Heinz in terms of its equity because its P/B ratio is 0.8 while the sector average is 4.29. The company's shares are currently trading -20.8% below their Graham number.
Analysts Give Kraft Heinz an Average Rating of Hold:
The 19 analysts following Kraft Heinz have set target prices ranging from $31.0 to $48.0 per share, for an average of $41.1 with a hold rating. As of April 2023, the company is trading -15.0% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
Kraft Heinz has a very low short interest because 1.6% of the company's shares are sold short. Institutions own 83.4% of the company's shares, and the insider ownership rate stands at 1.39%, suggesting a large amount of insider shareholders. The largest shareholder is Berkshire Hathaway, Inc, whose 27% stake in the company is worth $10,628,720,260.
