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1. Company Snapshot

1.a. Company Description

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.Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products.The company also offers dressings, healthy snacks, and other categories; and spices and other seasonings.


It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, and foodservice distributors and institutions, including hotels, restaurants, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers.The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015.The Kraft Heinz Company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on KHC

The Kraft Heinz Company's recent performance was driven by its Q2 earnings beat, with non-GAAP EPS of $0.69 surpassing analyst estimates of $0.64. Revenue fell 1.9% year-over-year to $6.35 billion, but beat the Wall Street consensus of $6.27 billion. The company's strategic moves, including pricing, innovation, and bold flavors, are expected to drive growth in 2025. Additionally, plans to split into two public companies by 2026 aim to sharpen focus and simplify operations. A potential 50% upside is anticipated from the breakup.

1.c. Company Highlights

2. Kraft Heinz's Q3 2025 Earnings: A Mixed Bag

The Kraft Heinz Company reported a modest year-over-year recovery in top-line performance, with revenues coming in at a level that was slightly below expectations. The actual EPS came out at $0.519, relative to estimates of $0.57. The company's operating environment remains challenging, with worsening consumer sentiment and ongoing inflation. Despite these headwinds, Kraft Heinz remains focused on long-term brand growth, with investments in R&D, marketing, and commercial functions.

Publication Date: Oct -30

📋 Highlights
  • Top-line Recovery: Modest year-over-year revenue growth reported, with Heinz brand up 13% in emerging markets and $0.5B revenue from Indonesia (12% of emerging markets business).
  • Profit Outlook Adjustment: Earnings revision linked to lower US consumption, elongated Taste Elevation recovery, and $300M incremental promotional spending in the US.
  • Spin-off Timeline: Separation into two companies on track for H2 2026, with $80M in incremental marketing spending and disciplined cash use for separation costs.
  • Emerging Markets Challenges: Decline in Indonesia demand (-12% revenue share) offset by progress elsewhere, with inventory rightsizing and distributor changes underway.
  • Q4 Guidance: Expected revenue decline of 100-120 bps due to inventory phasing, alongside low single-digit declines in both Global Taste Elevation and North American Grocery segments.

Financial Performance

The company's financial performance was mixed, with a decline in EBITDA but an increase in cash flow year-over-year. Kraft Heinz is being disciplined in its use of cash and is committed to investing in the right opportunities to set both companies up for success. The company's Q4 guidance implies a revenue decline of 100-120 basis points due to inventory phasing and lower consumption.

Segment Performance

The Global Taste Elevation Company and the North American Grocery Company both declined low single digits in the third quarter. The company expects the Global Taste Elevation Company to continue improving in the very low single-digit territory and to focus on returning to growth in 2026. Emerging Markets reported progress outside of Indonesia, where consumer sentiment has worsened, leading to a decline in demand.

Separation Update

The company is on track to complete the spin-off into two independent companies in the second half of 2026. Kraft Heinz is open to adjusting the brands and leadership structure if it would create more value for shareholders. The company is committed to being disciplined with its use of cash and will provide more information on one-off costs related to the separation in the coming months.

Valuation

With a P/E Ratio of -6.6 and an EV/EBITDA of -9.87, Kraft Heinz's valuation multiples suggest that the market is pricing in significant challenges for the company. However, the Dividend Yield of 6.56% and Free Cash Flow Yield of 12.58% could be attractive to income investors. Analysts estimate next year's revenue growth at 0.8%, which is relatively modest.

3. NewsRoom

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Kraft Heinz Company $KHC Shares Sold by Arrowstreet Capital Limited Partnership

Dec -03

Source: defenseworld.net

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Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

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Kraft, Coca-Cola among companies sued by San Francisco over ultra-processed foods in first-of-a-kind lawsuit

Dec -02

Source: nypost.com

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San Francisco sues Kraft, Mondelez over ultra-processed foods

Dec -02

Source: reuters.com

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Advisors Asset Management Inc. Buys 78,316 Shares of Kraft Heinz Company $KHC

Nov -26

Source: defenseworld.net

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Kraft Mac & Cheese Proves it's the 'Best Thing Ever' in Bold New Creative Platform

Nov -24

Source: businesswire.com

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Read This Before Buying Kraft Heinz Stock

Nov -24

Source: fool.com

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Kraft Heinz Company $KHC Shares Sold by Creative Planning

Nov -24

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.80%)

6. Segments

North America

Expected Growth: 2.5%

The North American market is mature, with slow growth expected due to high market penetration. However, the company's strong brand portfolio and potential for price increases will drive growth, aligned with the global growth hypothesis of 0.8, adjusted for regional market conditions.

International Developed Markets

Expected Growth: 1.8%

These markets have stable economies and consumer spending, but growth is limited by competition and market saturation. A growth rate slightly below the global hypothesis reflects these challenges, while steady gains from premium and niche brands will contribute to overall growth.

Emerging Markets

Expected Growth: 6.2%

Emerging markets are expected to drive growth due to rising consumer incomes, urbanization, and increasing demand for packaged foods. The growth rate above the global hypothesis reflects these favorable trends, positioning Kraft Heinz to capitalize on expanding market opportunities.

7. Detailed Products

Condiments and Sauces

A range of condiments and sauces that add flavor to meals, including ketchup, mayonnaise, and relish.

Meat and Seafood

A variety of meat and seafood products, including bacon, ham, and tuna.

Snacks

A range of snack foods, including crackers, nuts, and cheese.

Beverages

A selection of beverages, including coffee, tea, and juice.

Dairy and Cheese

A variety of dairy and cheese products, including milk, yogurt, and cheese.

Meal Solutions

A range of meal solutions, including macaroni and cheese, and frozen meals.

Infant Nutrition

A range of infant nutrition products, including formula and baby food.

Plant-Based Products

A range of plant-based products, including vegan cheese and meat alternatives.

8. The Kraft Heinz Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Kraft Heinz Company is medium due to the presence of alternative food and beverage products in the market. While there are some substitutes available, they are not a significant threat to the company's business.

Bargaining Power Of Customers

The bargaining power of customers for The Kraft Heinz Company is low due to the company's strong brand portfolio and wide distribution network. Customers have limited bargaining power to negotiate prices or demand customized products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Kraft Heinz Company is medium due to the presence of multiple suppliers for raw materials and ingredients. While suppliers have some bargaining power, the company's large scale of operations and long-term contracts mitigate this risk.

Threat Of New Entrants

The threat of new entrants for The Kraft Heinz Company is low due to the high barriers to entry in the food and beverage industry. New entrants would need significant investment in manufacturing, marketing, and distribution to compete with established players like Kraft Heinz.

Intensity Of Rivalry

The intensity of rivalry for The Kraft Heinz Company is high due to the presence of several established players in the food and beverage industry. The company faces intense competition from rivals such as General Mills, PepsiCo, and Nestle, which leads to high marketing and advertising expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.92%
Debt Cost 5.69%
Equity Weight 71.08%
Equity Cost 7.19%
WACC 6.75%
Leverage 40.68%

11. Quality Control: The Kraft Heinz Company passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Altria

A-Score: 8.0/10

Value: 6.8

Growth: 5.8

Quality: 7.5

Yield: 10.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

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Ingredion

A-Score: 6.5/10

Value: 6.8

Growth: 6.6

Quality: 5.9

Yield: 6.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

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General Mills

A-Score: 6.4/10

Value: 5.7

Growth: 4.1

Quality: 5.9

Yield: 8.0

Momentum: 5.5

Volatility: 9.3

1-Year Total Return ->

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Kraft Heinz

A-Score: 6.0/10

Value: 8.7

Growth: 3.8

Quality: 4.4

Yield: 9.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Walmart

A-Score: 5.5/10

Value: 2.4

Growth: 5.4

Quality: 4.8

Yield: 2.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

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Costco Wholesale

A-Score: 5.4/10

Value: 1.4

Growth: 7.0

Quality: 5.7

Yield: 2.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

24.59$

Current Price

24.59$

Potential

-0.00%

Expected Cash-Flows