Resources

KHC – Market expectations are for Uniform ROA to decline, and management may be concerned about divestitures, Taste Elevation, and marketing

March 24, 2021

  • The Kraft Heinz Company (KHC:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 20.7x Uniform P/E. Even at these levels, the market is pricing in bearish expectations for the firm, and management may be concerned about divestitures, Taste Elevation’s potential, and marketing efficiency
  • Specifically, management may lack confidence in their ability to capitalize on marketing efficiency opportunities and utilize divestiture proceeds for strategy acceleration and credit deleveraging. In addition, they may be exaggerating the Taste Elevation platform’s potential to improve their portfolio.