DUBAI, UAE, April 8, 2025 /PRNewswire/ -- In a world where everything is skippable, Heinz is reminding people that some things, just like its thick, rich ketchup, are worth the wait. Introducing Heinz's Post-Post Credits; the first-ever ad that gets interrupted by a movie.  Heinz launches the world’s first ad interrupted by a movie Exclusively playing during the showings of A Working Man on April 9th and, Mickey 17 and The Amateur on April 10th and 11th at Dubai Mall Reel Cinemas, this one-of-a-kind ci ...

Core Viewpoint - Kraft Heinz offers a high dividend yield of 5.3%, which is attractive compared to other investment options, but the company's growth is stagnant, raising concerns about the sustainability of its dividend payout [2][3][10]. Financial Performance - In 2024, Kraft Heinz experienced a 3% decline in net sales year over year, while adjusted operating income rose by 1.2% and adjusted earnings per share (EPS) increased by 2.7%. Free cash flow (FCF) was a positive aspect, growing by 6.6% year over year [3]. - The company's guidance for the current year indicates flat organic sales or a decline of up to 2.5%, with adjusted EPS expected to fall by 12.3% at the midpoint and flat FCF [4]. Dividend Sustainability - Kraft Heinz has maintained its dividend payout at $0.40 per share for 25 consecutive quarters since cutting it from $0.625 per share in 2019, reflecting the company's cautious approach due to poor business performance [6][7]. - The company generated $3.2 billion in FCF last year, using $1.9 billion for dividends and $988 million for share repurchases, indicating a strong ability to support its capital return program [3][7]. Balance Sheet and Credit Ratings - Kraft Heinz has improved its balance sheet, with reductions in total net long-term debt and better leverage ratios, which are positive indicators for its financial health [8]. - The company holds investment-grade credit ratings from major agencies, including BBB from S&P Global and Fitch Ratings, and Baa2 from Moody's, reflecting its efforts to strengthen its financial position [9]. Market Position and Growth Challenges - The company faces long-term challenges in adapting to changing consumer preferences, which have contributed to its stagnant growth and underperformance relative to the market [11]. - To enhance growth, Kraft Heinz may need to diversify its product lineup, similar to strategies employed by competitors like PepsiCo, which has successfully acquired brands in the healthy snacks and ready-to-eat meal segments [12]. Investment Outlook - Despite growth challenges, Kraft Heinz is considered a solid value stock with a high yield, making it an attractive option for risk-averse investors seeking to boost passive income [13].

Profit margins, meanwhile, have remained a bit steadier, but there have been some severe quarterly stumbles due to supply chain issues and a limited ability to pass on higher costs to customers. All in all, the company's price-to-earnings ratio now sits around 13.3 -- hovering around its lowest levels since 2020. On a forward basis -- that is, based on what analysts expect the company to earn next year -- shares trade at just 11 times earnings. That looks very cheap on paper, but there's one issue: Kraft He ...

Group 1: Stock Performance - Kraft Heinz (KHC) closed at $30.24, marking a +0.57% move from the prior day, outperforming the S&P 500 which lost 1.97% [1] - Over the last month, KHC shares decreased by 1.89%, underperforming the Consumer Staples sector's gain of 1.27% and the S&P 500's loss of 2.79% [1] Group 2: Financial Expectations - Analysts expect Kraft Heinz to post earnings of $0.60 per share, representing a year-over-year decline of 13.04% [2] - Revenue is projected at $6 billion, down 6.49% from the prior-year quarter [2] - For the full year, earnings are projected at $2.67 per share and revenue at $24.94 billion, indicating changes of -12.75% and -3.5% respectively from the prior year [3] Group 3: Analyst Projections and Rankings - Recent shifts in analyst projections for Kraft Heinz should be monitored, as they reflect short-term business dynamics [4] - The Zacks Rank system, which integrates estimate changes, currently rates Kraft Heinz at 4 (Sell) [6] - The consensus EPS projection has moved 0.21% lower in the past 30 days [6] Group 4: Valuation Metrics - Kraft Heinz has a Forward P/E ratio of 11.25, which is a discount compared to the industry's average Forward P/E of 16.57 [7] - The PEG ratio for KHC is 3.38, compared to the industry average PEG ratio of 1.94 [7] Group 5: Industry Context - The Food - Miscellaneous industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 179, placing it in the bottom 29% of all industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Analyst's Disclosure: I/we have a beneficial long position in the shares of KHC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any in ...

Core Viewpoint - Kraft Heinz shares have increased by approximately 3.2% over the past month, outperforming the S&P 500, but recent estimates have trended downward, indicating potential challenges ahead [1][2]. Group 1: Earnings Report and Estimates - Kraft Heinz's consensus estimate has decreased by 10.86% in the past month, reflecting a negative shift in expectations [2]. - The stock has received a subpar Growth Score of D and a similar score for momentum, while its value score is C, placing it in the middle 20% for that strategy [3]. Group 2: Outlook and Performance - The overall trend of downward estimate revisions suggests a Zacks Rank of 4 (Sell) for Kraft Heinz, indicating expectations of below-average returns in the coming months [4]. - Kraft Heinz is part of the Zacks Food - Miscellaneous industry, where competitor Mondelez has seen a 5.8% increase in shares over the past month, reporting revenues of $9.6 billion with a year-over-year growth of 3.1% [5]. - Mondelez's expected earnings for the current quarter are $0.67 per share, reflecting a 29.5% decrease from the previous year, and it also holds a Zacks Rank of 4 (Sell) with a VGM Score of D [6].

Core Viewpoint - BofA Securities analyst Peter T. Galbo downgraded Kraft Heinz Co (KHC) from Buy to Underperform, lowering the price forecast from $36.00 to $30.00 due to limited organic sales growth anticipated in the next 12 months [1]. Financial Performance - KHC is facing revenue challenges, unlike peers such as Hershey Co and Mondelez International Inc, which have adjusted their EPS forecasts for FY25 [2]. - The analyst revised the 2025-2026E EPS estimates down from $2.97 and $3.13 to $2.65 and $2.70, respectively, with a new 2027E EPS forecast of $2.75 [3]. Strategic Initiatives - Progress on KHC's two highest-priority platforms, "Accelerate" and "Protect," has been disappointing, impacting organic sales growth [3]. - The "Accelerate" initiatives, which represent about two-thirds of global sales, have slowed significantly, particularly in categories like condiments, Mac & Cheese, and Lunchables, with challenges expected to persist until at least the second half of 2025 [4]. Revenue Growth Prospects - Any positive revenue growth in 2025 is likely to stem from KHC's lower-priority "Balance" platform, primarily through coffee price increases, which are not viewed as a strong solution [5]. - The company recorded a $1.4 billion impairment on the Oscar Mayer brand in the fourth quarter, which may impact organic sales [5]. Market Valuation - The analyst's $30 price forecast is based on an 11x P/E multiple (down from 12x) on the CY26 EPS estimate [6]. - KHC shares were trading higher by 0.90% at $28.88 at the last check [6].

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive has bureaus and studios in key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2] Group 2 - The company is focused on sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] - Proactive adopts technology to enhance workflows and improve content production [4] - Automation and software tools, including generative AI, are used, but all content is edited and authored by humans [5]

Core Viewpoint - It is challenging to build a bullish case for Kraft Heinz (NASDAQ: KHC) at this time due to weak fundamentals despite the stock appearing cheap and closing at its lowest level in nearly five years [1]. Group 1: Company Performance - Kraft Heinz's market share, sales volumes, and profits are all declining, indicating underlying weaknesses in the company's performance [1].

Financial Performance - The Kraft Heinz Company expects net sales of approximately $26 billion for 2024[14]. - Net sales decreased 3.0% to $25.8 billion in 2024 compared to $26.6 billion in 2023, impacted by unfavorable foreign currency and acquisitions[176]. - Operating income decreased 63.2% to $1.7 billion in 2024, primarily due to non-cash impairment losses that were $3.0 billion higher than the previous year[179]. - Net income decreased 3.5% to $2.7 billion in 2024, influenced by unfavorable changes in operating income factors[180]. - Adjusted Operating Income increased 1.2% to $5.4 billion in 2024, driven by higher pricing and lower procurement costs[181]. - Organic Net Sales decreased 2.1% to $25.9 billion in 2024, primarily due to unfavorable volume/mix[176]. - Total net sales decreased to $25,846 million in 2024 from $26,640 million in 2023, representing a decline of 2.9%[200]. - Organic Net Sales for 2024 were $25,949 million, down from $26,496 million in 2023, reflecting a decrease of 2.1%[201]. - North America net sales decreased by 2.9% to $19,543 million in 2024 compared to $20,126 million in 2023[205]. - Emerging Markets net sales decreased to $2,768 million in 2024 from $2,891 million in 2023, a decline of 4.3%[200]. Market and Competitive Environment - The food and beverage industry remains highly competitive, with pressures on pricing and market share due to private label products and inflation[55][56]. - Consumer preferences are rapidly changing, necessitating continuous innovation and adaptation in product offerings to maintain market share[59]. - Retail consolidation is increasing purchasing power among larger customers, which may demand lower pricing and improved efficiency, adversely affecting the company's financial performance[64]. - The company must compete against private label products, which may affect market share and sales volume if consumers shift preferences[74]. Operational Structure and Strategy - Kraft Heinz operates through four segments: North America, International Developed Markets, West and East Emerging Markets, and Asia Emerging Markets[17][18]. - The company has restructured its product portfolio into eight consumer-driven platforms, with "Taste Elevation" accounting for 44% of consolidated net sales in 2024[29][32]. - The company divided its International segment into three operating segments to enhance focus on regional strategies as part of its long-term plan[165]. - The company has implemented initiatives to reduce costs and improve competitiveness, but future success depends on realizing the benefits of these initiatives[92]. Risks and Challenges - The company faces risks from economic conditions, geopolitical conflicts, and public perceptions that could adversely affect product sales and financial performance[60][62]. - The company faces risks from disputes with significant suppliers, which could affect product supply and sales[69]. - Climate change and regulatory responses may increase operating costs and impact demand for products[79]. - The company faces potential disruptions from natural disasters, geopolitical conflicts, and labor shortages, which could adversely affect product delivery and operational results[119]. - The company is exposed to volatility in commodity prices, which could materially and adversely affect its financial condition and operating results[105]. - The company faces heightened risks of legal claims and regulatory enforcement actions, which could adversely impact profitability and financial condition[110]. Employee and Corporate Culture - Kraft Heinz had approximately 36,000 employees globally as of December 28, 2024[41]. - Employee engagement reached an all-time high since the 2015 Merger, achieving top-quartile ranking on the Inclusion Index[43]. - The company emphasizes a culture of ownership and continuous learning, aiming to unlock employee potential through programs like Ownerversity[48]. - Total Rewards philosophy includes a flexible spectrum of compensation and benefits designed to support workforce equity and promote high-performance culture[49]. Financial Health and Debt - The company has a substantial amount of indebtedness, which could adversely affect its financial condition and ability to fund operations[94]. - The company’s long-term debt is rated BBB by S&P Global Ratings and Fitch Ratings, and Baa2 by Moody's, with a stable outlook from all three agencies[112]. - The company reported goodwill impairment losses of $1.6 billion and intangible asset impairment losses of $2.0 billion in 2024, compared to $510 million and $152 million respectively in 2023[167]. Innovation and Product Development - The company’s research and development focuses on product innovation, food safety, and supply chain optimization[26]. - The company's growth relies on the successful development and marketing of innovative new products, with inherent risks in consumer acceptance and potential impacts on existing offerings[63]. International Operations - Approximately 31% of the company's 2024 net sales were generated outside of the United States, indicating significant international exposure[87]. - The company derives a substantial portion of net sales from international markets, exposing net sales and net income to foreign exchange rate fluctuations[102]. - Changes in foreign currency values and economic conditions in international markets could significantly affect the company's profitability[88]. Cybersecurity and IT Risks - Information technology systems are critical for operations, and any severe disruptions or cybersecurity breaches could lead to significant business interruptions and reputational damage[123]. - The company has developed a cybersecurity risk management program to mitigate risks to employees, customers, and stakeholders, focusing on industry-recognized standards[136]. - Cybersecurity policies include identity and access control, network controls, and incident management to safeguard against threats[137].