How the Recent Share Slump Shapes the Outlook for Kraft Heinz in 2025

If you’re weighing whether to hold, buy, or sell Kraft Heinz stock right now, you’re not alone. The past five years have been anything but boring for shareholders, with the stock delivering a modest 5.3% gain over that period, despite some seriously choppy trading along the way. Most recently, the shares have slipped by 15.3% year-to-date and are down 20.4% over the past year. Even the past month hasn’t given much reason for cheer, with a decline of 4.5%. So, what’s driving these moves? Broader market developments, such as changing interest rate expectations and shifting appetites for defensive consumer staples, have undoubtedly played a role in affecting sentiment and risk perception around stocks like Kraft Heinz.

But let’s shift gears. If you’re like most thoughtful investors, recent price drops spark a question: does this mean Kraft Heinz is now undervalued, or is it a value trap? To help unpack that, let’s look at the numbers. Our valuation score for Kraft Heinz is a 4 out of 6, which means it meets four out of six standard undervaluation criteria. This doesn’t guarantee the stock is a bargain, but it’s a solid sign that there could be some appeal compared to peers. Is this the whole story? Not quite. Next, we’ll break down exactly how Kraft Heinz performs on different valuation approaches, and later, I’ll introduce a tool for sizing up stock value that outshines even the classic methods.

Why Kraft Heinz is lagging behind its peers

Approach 1: Kraft Heinz Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s true worth by projecting its future cash flows and then discounting them back to today’s value. It is widely considered one of the most reliable valuation methods because it is based on the fundamental ability of a business to generate cash over time.

For Kraft Heinz, the latest free cash flow (FCF) reported is $3.45 billion. Analyst forecasts extend out five years, and further estimates through 2035 are extrapolated based on conservative growth assumptions. For example, by 2028, FCF is expected to reach about $3.78 billion, growing gradually each year, with Simply Wall St projecting a steady expansion through the next decade.

Running these cash flow forecasts through the DCF model produces an estimated intrinsic value for Kraft Heinz stock of $80.66 per share. This represents a significant discount of 67.7% compared to the company’s current market price, suggesting the stock may be considerably undervalued according to this method.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Kraft Heinz.

Our Discounted Cash Flow (DCF) analysis suggests Kraft Heinz is undervalued by 67.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Kraft Heinz Price vs Sales

The Price-to-Sales (P/S) ratio is especially useful for valuing consumer staples like Kraft Heinz, where profits can fluctuate from year to year but sales remain more consistent. For stable, mature businesses with reliable revenue streams, the P/S ratio often gives a clearer picture of underlying value than earnings-based multiples, especially if short-term profitability is affected by temporary factors.

It is important to recognize that what counts as a “normal” or “fair” P/S multiple can vary widely. Strong expected growth or lower business risk typically supports a higher ratio, while slow-growing or riskier companies warrant a lower multiple. Benchmarks are essential for context, and for Kraft Heinz, the current P/S ratio is 1.22x. This sits below both the peer average of 1.88x and the food industry average of 0.90x, which may indicate a potentially attractive valuation.

The proprietary “Fair Ratio” from Simply Wall St refines this assessment. It estimates a balanced P/S ratio for Kraft Heinz at 1.44x, factoring in not just peer and industry data but also the company’s specific growth prospects, profit margins, market cap, and risk profile. Unlike typical peer comparisons, the Fair Ratio adapts to the nuances that can dramatically affect real-world value and provides a more tailored benchmark.

Since Kraft Heinz’s actual P/S ratio of 1.22x is below the Fair Ratio of 1.44x, the stock appears undervalued on this basis, which suggests room for upside if fundamentals hold steady.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Kraft Heinz Narrative

Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a story that puts your view of a company’s future—in terms of revenue, earnings, margins, and risk—front and center, clearly linking the “why” behind your outlook to a set of financial forecasts and a resulting fair value.

Unlike traditional valuation methods that focus only on numbers, Narratives let you articulate your reasoning and assumptions, then see how your story compares with those of other investors. This is all within the Simply Wall St Community page, where millions share their outlook and updates appear automatically as new information arrives, such as key news or earnings releases.

With Narratives, deciding when to buy or sell becomes more dynamic and actionable. You can track how your fair value estimate stacks up against the current share price, and adjust your perspective as the business evolves in real time.

For example, some investors on Simply Wall St believe Kraft Heinz’s innovation and international growth can drive the shares to as high as $51.00, while others, worried about weak core market performance and industry headwinds, assign a price target as low as $27.00. This highlights how Narratives help you take control and invest with conviction, tuned to your outlook.

Do you think there's more to the story for Kraft Heinz? Create your own Narrative to let the Community know!

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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