As of May 31, 2025, Kraft Heinz Co's estimated intrinsic value ranges from $22.48 to $48.93 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $43.74 | +63.6% |
| Discounted Cash Flow (5Y) | $33.15 | +24.0% |
| Dividend Discount Model (Multi-Stage) | $22.48 | -15.9% |
| Dividend Discount Model (Stable) | $40.05 | +49.8% |
| Earnings Power Value | $48.93 | +83.0% |
Is Kraft Heinz Co (KHC) undervalued or overvalued?
With the current market price at $26.73, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Kraft Heinz Co's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.28 | 0.34 |
| Cost of equity | 5.2% | 6.7% |
| Cost of debt | 4.4% | 5.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.64 | 0.64 |
| After-tax WACC | 4.4% | 5.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $33 | $58,720M | 83.8% |
| 10-Year Growth | $44 | $71,260M | 71.4% |
| 5-Year EBITDA | $18 | $40,207M | 76.3% |
| 10-Year EBITDA | $27 | $51,863M | 60.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $3,810M |
| Discount Rate (WACC) | 5.6% - 4.4% |
| Enterprise Value | $68,523M - $86,272M |
| Net Debt | $19,490M |
| Equity Value | $49,033M - $66,782M |
| Outstanding Shares | 1,184M |
| Fair Value | $41 - $56 |
| Selected Fair Value | $48.93 |
| Metric | Value |
|---|---|
| Market Capitalization | $31636M |
| Enterprise Value | $51126M |
| Trailing P/E | 11.92 |
| Forward P/E | 38.81 |
| Trailing EV/EBITDA | 9.65 |
| Current Dividend Yield | 617.47% |
| Dividend Growth Rate (5Y) | -0.35% |
| Debt-to-Equity Ratio | 0.64 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $13.12 |
| Discounted Cash Flow (5Y) | 25% | $8.29 |
| Dividend Discount Model (Multi-Stage) | 20% | $4.50 |
| Dividend Discount Model (Stable) | 15% | $6.01 |
| Earnings Power Value | 10% | $4.89 |
| Weighted Average | 100% | $36.80 |
Based on our comprehensive valuation analysis, Kraft Heinz Co's weighted average intrinsic value is $36.80, which is approximately 37.7% above the current market price of $26.73.
Key investment considerations:
Given these factors, we believe Kraft Heinz Co is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.