The Kraft Heinz Company (NASDAQ:KHC) shareholders are probably feeling a little disappointed, since its shares fell 3.8% to US$36.72 in the week after its latest quarterly results. It looks like the results were a bit of a negative overall. While revenues of US$6.4b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.3% to hit US$0.66 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, Kraft Heinz's 17 analysts are forecasting 2024 revenues to be US$26.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 30% to US$3.02. Before this earnings report, the analysts had been forecasting revenues of US$26.8b and earnings per share (EPS) of US$3.03 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$40.33, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Kraft Heinz, with the most bullish analyst valuing it at US$54.00 and the most bearish at US$35.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Kraft Heinz's revenue growth is expected to slow, with the forecast 0.8% annualised growth rate until the end of 2024 being well below the historical 1.1% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Kraft Heinz is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kraft Heinz's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Kraft Heinz analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Kraft Heinz .
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