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Kraft Heinz (KHC)
NASDAQ:KHC
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Kraft Heinz
(NASDAQ:KHC)68Neutral
Positive Factors
Dividend Yield
The income stream remains rich with a 5.5% dividend yield.
Negative Factors
Consumer Environment
Challenging consumer environment in key developed markets.
Organic Growth
Downgraded organic growth guidance on challenging consumer environment.
Kraft Heinz (KHC) vs. S&P 500 (SPY)
Market Cap
$37.43B
Dividend Yield5.21%
Average Volume (3M)10.49M
Price to Earnings (P/E)13.9
Beta (1Y)0.10
Revenue Growth-2.98%
EPS Growth-2.22%
CountryUS
Employees36,000
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)2.26
Shares Outstanding1,194,990,000
10 Day Avg. Volume11,107,168
30 Day Avg. Volume10,485,873
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.45
Price to Cash Flow (P/CF)6.70
P/FCF Ratio5.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$30.65Price Target Upside-1.07% Downside
Rating ConsensusHold
Number of Analyst Covering17
Kraft Heinz Business Overview & Revenue Model
Company DescriptionThe Kraft Heinz Company is one of the world’s leading consumer packaged food and beverage companies. The company engages in manufacturing and marketing food and beverage products including condiments and sauces, dairy, meats, meals, refreshment beverages, coffee, and other grocery products.
How the Company Makes MoneyKraft Heinz generates revenue primarily through the sale of its diverse portfolio of food and beverage products to retailers, distributors, and foodservice providers. The company's revenue model is based on manufacturing, marketing, and distributing its products across various channels, including supermarkets, convenience stores, and online platforms. Key revenue streams include the sales of condiments and sauces, dairy products, meats, and snacks, with a strong focus on leveraging its well-established brands. Additionally, Kraft Heinz engages in strategic partnerships and collaborations to expand its market reach and drive innovation in its product offerings. The company's earnings are influenced by factors such as consumer preferences, cost management, global market expansion, and the effective execution of marketing strategies to enhance brand visibility and customer loyalty.
Kraft Heinz Financial Statement Overview
Summary
Kraft Heinz's financial performance shows stability in its balance sheet and cash flow, but concerns arise from declining revenue and EBIT margins. The income statement indicates pressure on operational efficiency, though the balance sheet reflects a solid capital structure and manageable debt levels. Cash flow generation is strong, supporting financial flexibility.Income Statement
Kraft Heinz's income statement shows a stable gross profit margin of about 34.7% in 2024. However, there has been a decline in net income from the previous year, resulting in a lower net profit margin of 10.6% compared to 10.7% in 2023. Revenue decreased by 3% year-over-year, which is a concern. The EBIT margin fell significantly to 6.5% from 17.2% in the previous year, indicating pressure on operational efficiency.70
Positive
Balance Sheet
The balance sheet remains strong, with a moderate debt-to-equity ratio of 0.39 in 2024, reflecting manageable leverage. The equity ratio is 55.7%, showcasing a solid capital structure. Return on equity is sound at 5.6%, although slightly down from the previous year, indicating consistent but not exceptional shareholder returns.75
Positive
Cash Flow
Operating cash flow improved to $4.18 billion, up from $3.98 billion in 2023, indicating healthy cash generation. Free cash flow grew by 6.6%, which is a positive sign. However, the free cash flow to net income ratio is 1.15, suggesting that cash flow conversion from net income is adequate but not robust.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 25.85B | 26.64B | 26.48B | 26.04B | 26.18B | Gross Profit |
| 8.97B | 8.93B | 8.12B | 8.68B | 9.18B | EBIT |
| 1.68B | 4.57B | 3.63B | 5.39B | 5.82B | EBITDA |
| 2.72B | 5.51B | 4.83B | 4.68B | 3.40B | Net Income Common Stockholders |
| 2.74B | 2.85B | 2.36B | 1.01B | 356.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.33B | 1.40B | 1.04B | 3.44B | 3.42B | Total Assets |
| 88.29B | 90.34B | 90.51B | 93.39B | 99.83B | Total Debt |
| 19.21B | 20.65B | 20.07B | 21.82B | 28.31B | Net Debt |
| 17.88B | 19.25B | 19.03B | 18.37B | 24.89B | Total Liabilities |
| 38.96B | 40.62B | 41.64B | 43.94B | 49.59B | Stockholders Equity |
| 49.19B | 49.53B | 48.68B | 49.30B | 50.10B |
| Cash Flow | Free Cash Flow | |||
| 3.16B | 2.96B | 1.55B | 4.46B | 4.33B | Operating Cash Flow |
| 4.18B | 3.98B | 2.47B | 5.36B | 4.93B | Investing Cash Flow |
| -1.02B | -916.00M | -1.09B | 4.04B | -522.00M | Financing Cash Flow |
| -3.01B | -2.68B | -3.71B | -9.34B | -3.33B |
Kraft Heinz Technical Analysis
Positive
30.98
Price Trends
29.85
Positive
31.27
Negative
32.43
Negative
Market Momentum
0.40
Negative
57.00
Neutral
65.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KHC, the sentiment is Positive. The current price of 30.98 is above the 20-day moving average (MA) of 29.94, above the 50-day MA of 29.85, and below the 200-day MA of 32.43, indicating a neutral trend. The MACD of 0.40 indicates Negative momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 65.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KHC.
Kraft Heinz Risk Analysis
Kraft Heinz disclosed 34 risk factors in its most recent earnings report. Kraft Heinz reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kraft Heinz Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $83.08B | 18.76 | 17.12% | 2.79% | 1.18% | -5.47% | |
76 Outperform | $45.48B | 31.83 | 5.94% | 2.65% | 3.62% | -32.23% | |
73 Outperform | $28.62B | 21.36 | 35.58% | 2.73% | -16.16% | 41.01% | |
72 Outperform | $33.42B | 13.19 | 28.29% | 3.85% | -1.48% | 11.45% | |
68 Neutral | $37.43B | 13.87 | 5.58% | 5.21% | -2.98% | -2.22% | |
66 Neutral | $12.19B | 24.95 | 5.60% | 5.48% | -2.00% | -50.02% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% |
* Consumer Defensive Sector Average
Performance Comparison
KHC
Kraft Heinz
30.98
-2.54
-7.58%
CAG
Conagra Brands
25.47
-0.92
-3.49%
KDP
Keurig Dr Pepper
33.60
5.28
18.64%
GIS
General Mills
61.14
-1.03
-1.66%
K
Kellanova
82.36
30.54
58.93%
MDLZ
Mondelez International
65.29
-3.68
-5.34%
Kraft Heinz Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 4.73% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed situation for Kraft Heinz. While there are positive strategic developments and shareholder returns, significant challenges remain in market performance and operational issues like supply chain and tax impacts. The company is focusing on innovation and strategic growth areas but faces hurdles in marketing effectiveness and market share recovery.Highlights
Shareholder Returns
Kraft Heinz returned $2.7 billion to shareholders through share buybacks and dividends, claiming the highest yield in the food industry.
Margin Expansion
Increased profit margins by 100 basis points in 2024, with expectations for modest expansion in 2025 between flat to 20 bps.
Emerging Markets Growth Strategy
Planned 17% distribution increase with 40,000 additional points in 2025 already mapped out.
Innovation Pipeline
75% of the 2025 innovation pipeline is already locked in, with focus on Away From Home and Emerging Markets growth.
Capri Sun Turnaround
Capri Sun showed a 5-point improvement in dollar sales in Q4 2024 due to product renovation and expanded distribution.
Lowlights
Market Share Decline
Kraft Heinz is underperforming in categories where competitors are maintaining historical growth rates, particularly in the U.S. retail sector.
Tax Rate Increase
The tax rate in the P&L will increase by 500 bps starting in 2025 due to international tax regulation changes, although the cash tax rate impact will be about 200 to 300 bps.
Lunchables Supply Issue
Supplier ingredient issue in Q4 2024 continues to affect Lunchables, impacting sales into Q1 2025.
Limited Marketing Spend
Marketing spend, including market research, remains lower than peers despite a planned shift to more consumer-facing dollars.
Promotional Challenges
Continued challenges in promotional strategies, with base volumes impacting promotional effectiveness.
Company Guidance
During The Kraft Heinz Company Quarter 4 2024 Earnings call, CEO Carlos Abrams-Rivera emphasized the company's success in returning $2.7 billion to stockholders through share buybacks and dividends, yielding the highest returns in the food industry. He highlighted a 100 basis point margin expansion in 2024 and projected a more modest expansion of flat to 20 basis points for 2025. Key growth pillars were discussed, including a 75% lock-in of new customer wins in Away From Home, a 17% increase in distribution in Emerging Markets with an additional 40,000 points planned for 2025, and a 75% lock-in of the 2025 innovation pipeline in North America Retail. The company is investing in technology-led solutions to drive efficiencies and shift more marketing dollars towards consumer-facing activities, with expectations of achieving efficiencies higher than inflation in 2025. Additionally, they anticipate double-digit growth in Emerging Markets by the end of 2025.Kraft Heinz Corporate Events
Executive/Board Changes
Vince Garlati Returns as Kraft Heinz Accounting Officer
Positive
Nov 15, 2024
Vince Garlati is resuming his role as Principal Accounting Officer at Kraft Heinz, bringing stability to the company’s financial leadership after his leave of absence. His return promises to strengthen the financial operations without any conflicts of interest, as there are no personal ties or undisclosed transactions impacting his position.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.