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Kraft Heinz analysis

Kraft Heinz analysis

13 January 2021

An American company that emerged after the merger of Kraft Foods Inc. and H.J. Heinz Company. It is the third largest food and beverage company in North America and the fifth largest in this segment worldwide. The company’s products can be found in almost any supermarket in more than 190 countries around the world. The company owns such well-known brands as Heinz, Philadelphia and Velveeta. But despite its widespread use, most of Kraft Heinz’s revenue comes from the United States.

Competition in this sector is high. The main food manufacturers are large corporations from the USA and Europe. Kraft Heinz’s most notable competitors are Colgate-Palmolive Co, Unilever PLC, Coca-Cola Co and Kellogg Co.

TTM Revenue: $ 25.4B (+ 2% YoY)

TTM Operating Profit: $ 5.0B (+ 0.4% YoY)

Net Income: – $ 192M

Earnings per share last quarter: $ 0.7, better than $ 0.62 forecast

The company operates in a sustainable sector. Therefore, the crisis did not affect the company’s financial position so much.

Geographic distribution of revenue:

United States – 71.09%

EMEA – 10.21%

Canada – 7.53%

Rest of World – 11.16%

EPS forecast for the current quarter: $ 0.73

Despite the company’s global brand recognition and rich history, the company’s financial position is far from ideal. The ratio of net debt to EBITDA for the last 12 months is 10, which is quite a high figure. It reflects the fact that the company’s debt burden is quite large. Therefore, the rating agencies S&P and Fitch determine the company’s credit rating as BB +. Moreover, many analysts argue that Kraft Heinz shares are currently significantly overvalued.

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    13 January 2021
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