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Kraft Heinz (KHC) Raises View on Effective Transformation
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The Kraft Heinz Company (KHC - Free Report) is leaving no stones unturned to transform its business to unleash its full potential. The iconic consumer packaged food and beverage company successfully deployed its Operating Model in the last two years. Thanks to Kraft Heinz’s effective portfolio management, nearly two-thirds of its business now lies in fast-growing consumer platforms. The company is committed to accelerating its profit and enhancing the long-term shareholders’ value.
As part of its next transformation phase, management unveiled AGILE@SCALE. The strategy will help Kraft Heinz to enhance its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators. The company will leverage its financial flexibility to take over other capabilities. Courtesy of an improved portfolio and Operating Model combined with the promising AGILE@SCALE strategy, the company is increasing its long-term growth targets
The company now expects organic net sales growth between 2-3% in the long-term. The metric was expected to rise 1-2%. Adjusted EBITDA growth is now envisioned in the range of 4-6%, up from the previous guidance of 2-3% growth. Management now expects to see a 6-8% adjusted earnings per share (EPS) growth in the long term. The metric was previously expected to grow 4-6%. The outlook reflects the company’s business reorientation to date as well as optimism surrounding its next-phase transformation. Apart from this, Kraft Heinz expects to generate at least $2 billion of gross efficiencies, slightly ahead of its previous outlook.
For 2022, Kraft Heinz expects adjusted EBITDA in the $5.8-$6 billion range, including the impact of an extra week in 2022. This view also reflects the impact of solid organic sales along with the ongoing efforts to manage inflationary pressures. Management stated that the view also considers the impacts from the divestitures and 53rd week in 2022.
Image Source: Zacks Investment Research
In other news, Kraft Heinz and Simplot Food Group — a division of the J.R. Simplot Company— signed a long-term agreement to name Simplot as the exclusive manufacturer and supplier of Ore-Ida. Simplot, a well-known manufacturer and distributor of potatoes, will grow the brand by introducing technology and innovation to the business. The move is in sync with Kraft Heinz’s intentions to manage its portfolio with agility to accelerate growth.
Kraft Heinz also announced a joint venture with TheNotCompany, Inc. (“NotCo”) — a well-known food tech start-up. Through this venture, the parties will work to accelerate the adoption of plant-based foods. The joint venture is an important step in Kraft Heinz’s product portfolio transformation.
Tyson Foods, a meat provider, currently sports a Zacks Rank #1. Shares of Tyson Foods have increased 10.5% in the past three months.
The Zacks Consensus Estimate for Tyson Foods’ current financial year sales suggests growth of 9.5% from the year-ago period’s reported number. TSN has a trailing four-quarter earnings surprise of 32.2%, on average.
Pilgrim's Pride, the provider of frozen, fresh and value-added chicken products, currently sports a Zacks Rank #1. Shares of Pilgrim's Pride have declined15.4% in the past three months.
The Zacks Consensus Estimate for Pilgrim's Pride current financial year EPS suggests growth of 16.2% from the year-ago reported number. PPC has a trailing four-quarter earnings surprise of 24.9%, on average.
Flowers Foods, which produces and markets packaged bakery products, carries a Zacks Rank #2 (Buy). Shares of Flowers Foods have moved up 5.4% in the past three months.
The Zacks Consensus Estimate for Flowers Foods' 2022 financial year EPS suggests growth of 3.2% from the year-ago period’s reported number. FLO has a trailing four-quarter earnings surprise of 9%, on average.
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Kraft Heinz (KHC) Raises View on Effective Transformation
The Kraft Heinz Company (KHC - Free Report) is leaving no stones unturned to transform its business to unleash its full potential. The iconic consumer packaged food and beverage company successfully deployed its Operating Model in the last two years. Thanks to Kraft Heinz’s effective portfolio management, nearly two-thirds of its business now lies in fast-growing consumer platforms. The company is committed to accelerating its profit and enhancing the long-term shareholders’ value.
As part of its next transformation phase, management unveiled AGILE@SCALE. The strategy will help Kraft Heinz to enhance its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators. The company will leverage its financial flexibility to take over other capabilities. Courtesy of an improved portfolio and Operating Model combined with the promising AGILE@SCALE strategy, the company is increasing its long-term growth targets
The company now expects organic net sales growth between 2-3% in the long-term. The metric was expected to rise 1-2%. Adjusted EBITDA growth is now envisioned in the range of 4-6%, up from the previous guidance of 2-3% growth. Management now expects to see a 6-8% adjusted earnings per share (EPS) growth in the long term. The metric was previously expected to grow 4-6%. The outlook reflects the company’s business reorientation to date as well as optimism surrounding its next-phase transformation. Apart from this, Kraft Heinz expects to generate at least $2 billion of gross efficiencies, slightly ahead of its previous outlook.
For 2022, Kraft Heinz expects adjusted EBITDA in the $5.8-$6 billion range, including the impact of an extra week in 2022. This view also reflects the impact of solid organic sales along with the ongoing efforts to manage inflationary pressures. Management stated that the view also considers the impacts from the divestitures and 53rd week in 2022.
Image Source: Zacks Investment Research
In other news, Kraft Heinz and Simplot Food Group — a division of the J.R. Simplot Company— signed a long-term agreement to name Simplot as the exclusive manufacturer and supplier of Ore-Ida. Simplot, a well-known manufacturer and distributor of potatoes, will grow the brand by introducing technology and innovation to the business. The move is in sync with Kraft Heinz’s intentions to manage its portfolio with agility to accelerate growth.
Kraft Heinz also announced a joint venture with TheNotCompany, Inc. (“NotCo”) — a well-known food tech start-up. Through this venture, the parties will work to accelerate the adoption of plant-based foods. The joint venture is an important step in Kraft Heinz’s product portfolio transformation.
Shares of the Zacks Rank #3 (Hold) company have increased 13.9% in the past three months compared with the industry’s growth of 6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Solid Food Stocks? Check These
Some better-ranked stocks are Tyson Foods, Inc. (TSN - Free Report) , Pilgrim's Pride (PPC - Free Report) and Flowers Foods (FLO - Free Report) .
Tyson Foods, a meat provider, currently sports a Zacks Rank #1. Shares of Tyson Foods have increased 10.5% in the past three months.
The Zacks Consensus Estimate for Tyson Foods’ current financial year sales suggests growth of 9.5% from the year-ago period’s reported number. TSN has a trailing four-quarter earnings surprise of 32.2%, on average.
Pilgrim's Pride, the provider of frozen, fresh and value-added chicken products, currently sports a Zacks Rank #1. Shares of Pilgrim's Pride have declined15.4% in the past three months.
The Zacks Consensus Estimate for Pilgrim's Pride current financial year EPS suggests growth of 16.2% from the year-ago reported number. PPC has a trailing four-quarter earnings surprise of 24.9%, on average.
Flowers Foods, which produces and markets packaged bakery products, carries a Zacks Rank #2 (Buy). Shares of Flowers Foods have moved up 5.4% in the past three months.
The Zacks Consensus Estimate for Flowers Foods' 2022 financial year EPS suggests growth of 3.2% from the year-ago period’s reported number. FLO has a trailing four-quarter earnings surprise of 9%, on average.