KHC - Embedded Expectations Analysis - 2020 09 08
The Kraft Heinz Company (KHC:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 20.5x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may be concerned about the sustainability of demand, EBITDA margins, and sales growthSpecifically, management may lack confidence in their ability to sustain retail and foodservice sales growth and continue mitigating costs. Moreover, they may have concerns about the continued impact of the pandemic in 2021 and further declines in their EBITDA. Management may also lack confidence in their ability to execute plans for H2 2020, establish a strong base of sales and earnings, and connect with new customers. Furthermore, they may have concerns about their investment position, lower margins from their channel mix, and the sustainability of their growth drivers. In addition, management may be concerned about the sustainability of demand and their ability to meet said demand. Finally, they may lack confidence in their ability to continue implementing price increases
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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