Kraft Heinz's Sales and Profits Erode in 2Q; Shares No Longer a Bargain
We don’t expect to alter our $66 fair value estimate for narrow-moat Kraft Heinz following second-quarter results that included a 0.4% downtick in organic sales, as a 1.3% benefit from higher prices was more than offset by a 1.7% hit from lower volume and unfavorable mix, and a 100-basis-point degradation in adjusted operating margins to 25.6%. The sales shortfall was concentrated in Kraft Heinz's developed markets, which provide around three fourths of sales, with the United States down 1.9% on...Kraft Heinz is a food and beverage company. The company manufactures and markets food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products throughout the world. The company has three reportable segments defined by geographic region: United States, Canada, and Europe, Middle East, and Africa. The company's remaining businesses are combined and disclosed as Rest of World. Rest of World comprises two operating segments: Latin America and Asia Pacific.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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