KHC
The Kraft Heinz Company
$23.79
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 19.5% below fair value
You pay
$23.79
Bear
$24.35
Fair
$29.56
Bull
$34.78
Bear
$24.35
+2.3%
$1.91 × 14x P/E
Fair
$29.56
+24.3%
$1.91 × 17x P/E
Bull
$34.78
+46.2%
$1.91 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
12.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $22.78 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $29.56 per share.
Warnings
Wall Street's average price target is $22.78 (from 35 analysts). Our estimate is 43% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples