KHC

What You May Have Missed About Kraft Heinz (KHC)

Today we're going to take a closer look at large-cap Consumer Staples company Kraft Heinz, whose shares are currently trading at $32.09. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

The Market May Be Undervaluing Kraft Heinz's Assets and Equity:

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 company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 24.36 and an average price to book (P/B) ratio of 4.29. In contrast, Kraft Heinz has a trailing 12 month P/E ratio of 12.5 and a P/B ratio of 0.79.

Kraft Heinz's PEG ratio is 2.14, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

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 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.

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