A Look at Kraft Heinz’s (KHC) Valuation Following Spin-Off Plans and Reduced 2025 Outlook

Kraft Heinz (KHC) announced plans for a tax-free spin-off, splitting the company into two independent public firms. This major restructuring follows recent mixed third-quarter results and softer sales volumes.

See our latest analysis for Kraft Heinz.

Recent months have been eventful for Kraft Heinz, from launching bold new product collaborations to unveiling a major spin-off plan. Despite these headline-grabbing moves, the share price has been trending lower, posting a year-to-date share price return of -21.1% and a one-year total shareholder return of -22.3%, as weaker sales, reduced guidance, and muted consumer demand weigh on sentiment. The long-term track record remains cautious, with five-year total shareholder return barely treading water, but the company’s proactive steps signal it is not standing still.

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With shares down over 20% this year and a major corporate split on the horizon, is Kraft Heinz now trading at a discount ready for a rebound? Or is the market already pricing in the company's uncertain path forward?

Most Popular Narrative: 15.7% Undervalued

Kraft Heinz’s most influential narrative points to a fair value meaningfully above its recent closing price, highlighting substantial upside compared to the market’s current stance on the shares. The narrative’s perspective is driven by a conviction that the company’s core transformation could spark new growth and profitability over the next three years.

Ongoing portfolio optimization, divesting non-core brands and reinvesting into high-margin segments and key power brands, should lead to structurally higher operating margins and improved profitability in future periods. Continued disciplined investment in marketing and the Brand Growth System, especially in North America retail, is already showing performance improvement and is expected to stabilize and eventually reaccelerate top line revenue while maintaining pricing power in an environment of rising consumer price sensitivity.

Read the complete narrative.

How will Kraft Heinz attempt to turn lagging sales into a powerful comeback story? The fair value rests on a financial transformation with more profits, higher margins, and ambitious margin targets. Want to uncover the bold strategic bets and market forecasts that support this narrative’s price target? Dive in to see what could drive Kraft Heinz’s next act.

Result: Fair Value of $28.82 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent volume declines and questions about the split’s value creation could affect both revenue recovery and investor sentiment moving forward.

Find out about the key risks to this Kraft Heinz narrative.

Another View: Testing the Value with Our DCF Model

While multiples suggest Kraft Heinz trades below its estimated fair value, our SWS DCF model tells a different story and values the stock at $68.79. This big gap raises an important question—is the market overlooking the company’s future cash flow potential, or is caution warranted?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Kraft Heinz Narrative

If you see Kraft Heinz differently, or want to dig into the data your own way, our platform lets you craft your own perspective in just a few minutes with ease. You can then share your findings Do it your way

A great starting point for your Kraft Heinz research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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