A Look at Kraft Heinz’s Valuation Following Split Announcement and Buffett’s Public Concerns

If you own Kraft Heinz (KHC), you probably saw the headlines: on September 2, the company revealed plans to split into two separate, publicly traded businesses. The idea is to let each segment, condiments and sauces on one side and the North American grocery division on the other, invest more deliberately in its strengths and pursue growth at its own speed. Naturally, big news like this got Wall Street talking, but what really made people sit up was Warren Buffett’s public disappointment. As the company’s biggest shareholder, when Buffett goes public with doubts and hints at a possible exit, the stakes feel much higher.

It is a fascinating turn for a stock that has faced a rough ride, with shares down more than 20% in the past year despite some ups and downs along the way. There has been no shortage of recent news swirling around execution risks, debt division, and whether this dramatic move fixes more problems than it creates. Investor confidence seems to be wavering, but the split could also release value that has been trapped in the current structure, especially if management can deliver without further surprises.

With all this drama playing out, is Kraft Heinz trading at a bargain, or is the market already factoring in all the uncertainty and whatever growth this split might deliver?

Most Popular Narrative: 10.6% Undervalued

According to the most widely followed narrative, Kraft Heinz is currently trading at a discount to its fair value. This perspective finds the company's shares undervalued by over 10%, based primarily on expected turnarounds in profitability and future growth.

Sustained investment in emerging markets, where both volume and margins are expanding at a double-digit rate, positions Kraft Heinz to capitalize on the rapid rise of the global middle class and urbanization. This trend could drive top line revenue growth and long-term earnings potential.

Want to know why analysts see serious upside here? This valuation hinges on a set of bullish profit and growth projections, but the real surprise is how low the expected multiple is compared to other industry giants. Which numbers tip the scale in Kraft Heinz’s favor? The narrative’s full breakdown may change your view of the company’s story.

Result: Fair Value of $29.82 (UNDERVALUED)

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

However, weak core market performance and ongoing consumer demand shifts could quickly unravel the bullish argument and limit future upside for Kraft Heinz shares.

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

Another View: Our DCF Model Paints an Even Cheaper Picture

Taking a different approach, our SWS DCF model suggests Kraft Heinz may be trading even further below its fair value than price-based comparisons imply. Could this deeper discount signal a hidden opportunity, or does it indicate more risk?

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

Stay updated when valuation signals shift by adding Kraft Heinz to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Kraft Heinz Narrative

If you want to dig deeper, challenge these stories, or follow your own path through the numbers, you can build one yourself in just a few minutes: 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.

Ready for More? Find Your Next Big Opportunity

Why settle for one stock when you could uncover several game-changers? Use these specialized lists to strengthen your portfolio with smarter choices you might otherwise miss out on.

• Spot undervalued gems with unrealized growth potential using our tool for sharpening your search for undervalued stocks based on cash flows.
• Target top income generators and secure steady payouts by checking out the hub for dividend stocks with yields > 3%.
• Catch the next revolution in artificial intelligence with a focus on innovators featured in AI penny stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com