Added to YB: 2024-03-20
Pitch date: 2024-03-17
KHC [bullish]
The Kraft Heinz Company
-21.71%
current return
Author Info
Kroker Equity Research is a value investor that uses Discounted Cash Flow (DCF) Model or the Excess Returns Model to value stocks. Sign up for their newsletter.
Company Info
The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally.
Market Cap
$29.5B
Pitch Price
$31.29
Price Target
46.00 (+88%)
Dividend
6.42%
EV/EBITDA
7.36
P/E
-6.80
EV/Sales
1.89
Sector
Food Products
Category
value
Kraft Heinz - King of Impairments
KHC: Buffett holding 26.7% stake since 2015 merger despite 54% price drop. New CEO aims to revive growth amid brand relevance issues. Net sales up on pricing but volumes down. Gross margin -3ppt since 2017. $12.6B brand impairments, $11.8B goodwill hit. EBIT margin -8ppt in 7yrs, ROIC 6-7%. $3B buyback (@$34/sh) signals value. Fair value $41-46 on conservative DCF. 11x P/E vs 14x hist avg = 17% upside. Skeptical of turnaround but undervalued.
Read full article (13 min)