The Kraft Heinz Company KHC
Kraft Heinz remains a hold as early turnaround signals—Q2 earnings beat, raised 2026 organic sales outlook, and CEO Cahillane's $5.0M open-market purchase at $23.46 in May 2026—are offset by the still-damaged FY2025 fundamental picture, which included a $5.85B net loss (EPS -$4.93), a third consecutive year of revenue decline to $24.94B (-3.5% YoY), and gross margin compression to 33.3%. Free cash flow of $3.66B and a P/S of 1.21 (~30% below the peer median of 1.73) provide downside support, while smart money improving to 0.0844 as of Q2 2026 from -0.073 in Q4 2025 and new institutional positions from BNY Mellon and Barrow Hanley suggest accumulating interest.
The risk/reward is balanced but tilting positive; the call upgrades to buy once revenue stabilizes and impairment-driven losses are clearly behind the company.
What could go wrong
- Persistent revenue erosion. Revenue has declined three straight years from $26.64B (FY2023) to $24.94B (FY2025); if Q2's improved organic sales outlook fails to translate into absolute revenue growth, the turnaround narrative stalls.
- Margin pressure from reinvestment. Gross margin fell from 34.7% in FY2024 to 33.3% in FY2025, and Seeking Alpha notes 2026 earnings will be pressured by higher spending on key brands before a potential 2027 rebound.
- Leverage and balance sheet risk. Total debt rose to $21.22B in FY2025 from $19.87B in FY2024 while stockholders' equity fell to $41.66B from $49.19B, increasing financial fragility if rates remain elevated.
- North America volume weakness. Zacks notes weak North America volumes persist despite the Q2 beat, making the core domestic market the primary swing factor for any recovery.
What would change my mind
Where this comes from: FMP annual fundamentals, FY2025 · FMP annual fundamentals, FY2025 · Insider transactions, 2026-05-12 · Peer relative, as of latest data. Orin's read on KHC; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All KHC filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Berkshire Hathaway | $7.7B | 2.6% of fund |
| Vanguard Capital Management | $1.3B | 0.0% of fund |
| Invesco | $1.2B | 0.1% of fund |
| State Street | $1.1B | 0.0% of fund |
| Vanguard Portfolio Management | $962.6M | 0.0% of fund |
| Geode Capital Management | $731.3M | 0.0% of fund |
97 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 62 Form 4 filings, net −$4.0M. Of the 50 on hand, 1 was an open-market purchase and 5 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about KHC
Orin answers questions about KHC from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/S | 1.14× | 1.66× | — |
| P/B | 0.8× | 0.9× | — |
Its P/E sits below all 5 of the last 5 years (−1.70σ from its own mean).
-5.5%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $3.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$24
$18 – $32 · +1% against today's price
- 4 buy or overweight
- 20 hold
- 11 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| KHCThe Kraft Heinz Company | $28B | — | — | 32.8% | -13.6% | -8% |
| ADMArcher-Daniels-Midland Company | $39B | 22.4× | 8.9× | 6.9% | 2.2% | 8% |
| ELThe Estée Lauder Companies Inc. | $34B | 190.7× | 47.3× | 75.5% | 1.2% | 5% |
| GISGeneral Mills, Inc. | $19B | — | 10.5× | 33.4% | -4.9% | -11% |
| KVUEKenvue Inc. | $34B | 20.2× | 13.0× | 58.2% | 10.8% | 16% |
| MKCMcCormick & Company, Incorporated | $13B | 7.9× | 12.7× | 38.6% | 22.0% | 26% |
| SJMThe J. M. Smucker Company | $13B | 56.6× | 14.9× | 38.7% | 2.5% | 4% |
The median is of the 5 peers listed above and nothing else — check it against the column. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $27 | $24.06 · +13% | 2026-06-10 |
| Levered DCF | $72 | $24.06 · +201% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.