Kraft Heinz (KHC, Financial) has announced its first-quarter revenue, reaching $6 billion, slightly underperforming the market expectation of $6.02 billion. The company's CEO emphasized their dedication to managing factors within their control and making strategic investments to enhance their brands' quality, flavor, and value for consumers.
Despite facing increased market challenges, KHC achieved results that aligned closely with their expectations for revenue. The leadership expressed optimism about these outcomes and committed to building on this momentum to ensure steady growth and continued profitability in the future.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for The Kraft Heinz Co (KHC, Financial) is $31.42 with a high estimate of $56.91 and a low estimate of $27.00. The average target implies an upside of 9.07% from the current price of $28.81. More detailed estimate data can be found on the The Kraft Heinz Co (KHC) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, The Kraft Heinz Co's (KHC, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Kraft Heinz Co (KHC, Financial) in one year is $34.44, suggesting a upside of 19.54% from the current price of $28.81. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Kraft Heinz Co (KHC) Summary page.
KHC Key Business Developments
Release Date: February 12, 2025
- Shareholder Returns: $2.7 billion returned through share buybacks and dividends.
- Profit Margins: Focus on improving profit margins despite economic challenges.
- Free Cash Flow: Efforts to boost free cash flow highlighted.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Kraft Heinz Co (KHC, Financial) returned $2.7 billion to shareholders through share buybacks and dividends, providing the highest yield in the food industry.
- The company has locked in 75% of new customer wins in the Away From Home segment, contributing to a 40% year-over-year incremental growth.
- In Emerging Markets, The Kraft Heinz Co (KHC) plans to increase distribution by 40,000 additional points in 2025, building on a 17% increase from the previous year.
- 75% of the 2025 innovation pipeline is already secured, indicating a strong focus on product development and market readiness.
- The company is investing in technology-led solutions to drive efficiencies and improve margins, alongside increased consumer-facing marketing efforts.
Negative Points
- The Kraft Heinz Co (KHC) faces challenges in achieving volume growth for key brands, with concerns about whether current investment levels are sufficient.
- The company is experiencing market share softness in the US, particularly in the Retail segment, which is impacting overall performance.
- There is a lingering supplier issue affecting the Lunchables brand, which is expected to continue impacting sales into the first quarter of 2025.
- The company's tax rate is expected to increase by 500 basis points in 2025, impacting the P&L, although cash tax rate impact is lower.
- Despite improvements, the company's marketing spend as a percentage of revenue remains below some peers, raising questions about sufficiency in competitive dynamics.
