Kraft Heinz Company is of the largest food & beverage companies, offering food and beverage products, including cheese, meats, refreshment beverages, coffee, packaged dinners, refrigerated meals, snack nuts, dressings, ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition, and other food and grocery products. The company was founded in 2015 and is based in Pittsburgh, Pennsylvania.
KHC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Kraft Heinz Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Kraft Heinz Co ranked in the 55th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 55.5%. As for the metrics that stood out in our discounted cash flow analysis of Kraft Heinz Co, consider:
Kraft Heinz Co's effective tax rate, as measured by taxes paid relative to net income, is at 22 -- greater than 83.89% of US stocks with positive free cash flow.
The weighted average cost of capital for the company is 10. This value is greater than 78.29% stocks in the Consumer Defensive sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
DG, HLF, TGT, DLTR, and UN can be thought of as valuation peers to KHC, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
Kraft Heinz (KHC) has made an important deal in tackling its debt load which has been strangling the company for years. Mid-September, the company announced a deal to sell its natural cheese business to Lactalis. The deal looks reasonable as the company is addressing leverage and with pro-forma earnings multiples...
The Value Investor on Seeking Alpha | September 28, 2020
French-headquartered Lactalis Group has entered into a definitive agreement for the acquisition by its US affiliate of Kraft Heinzâs natural, grated, cultured and specialty cheese businesses in the US, grated cheese business in Canada, and entire international cheese business outside North America.