KHC - Embedded Expectations Analysis - 2018 03 21
The Kraft Heinz Company (KHC:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 22.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management has concerns about their investments, European operations, and costsSpecifically, management may lack confidence in their in-house capability platforms, specifically in their category management tool, and may be exaggerating their ability to drive profitable organic sales growth through accelerating investments. Furthermore, they may be overstating their satisfaction with their European operations, and may have concerns about their incremental interest expense. Moreover, they may lack confidence in their ability to grow EBITDA for the full year, and may be concerned about higher commodity volatility, particularly in dairy and nuts, driving increased commodity costs
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.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
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