Kraft Heinz price outlook after FQ4 earnings

The Kraft Heinz Company (NASDAQ: KHC) shares are advancing this trading week, and the current price stands at $37.67.

This Wednesday, Kraft Heinz reported its fourth-quarter results and announced that it expects to deliver a low-single-digit percentage increase in organic net sales for the 2022 fiscal year.

Organic revenue rose 3.9%

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Kraft Heinz reported its fourth-quarter results yesterday; total revenue has decreased by -3.3% Y/Y to $6.71 billion, while the non-GAAP earnings per share were $0.79 (beats by $0.16).

Organic revenue rose 3.9% during the fourth quarter, while the pricing was up 3.8 percentage points compared with the fourth quarter of 2020.

It is important to say that total revenue has decreased below the expectations (beats by $80 million), and the company’s management announced that it expects a low-single-digit percentage increase in organic net sales for the 2022 fiscal year.

CEO Miguel Patricio said that Kraft’s balance sheet is much stronger than two years ago, and the adjusted EBITDA for the full 2022 fiscal year should be in the range of $5.8 billion to $6 billion. CEO Miguel Patricio added:

I think that what we have to do is even accelerate the path and the speed to accelerate profitable growth and unlock greater efficiencies. Emerging markets will continue being a great engine of our growth while the brand Heinz is getting better every day from a consumer standpoint, which gives us a lot of opportunities for growth to expand Heinz further, not only Ketchup but other products.

Kraft Heinz expects continued stronger consumption versus pre-pandemic levels, and the company will continue to manage inflationary pressures as it continues to invest in long-term growth.

Paulo Basilio, CFO of Kraft Heinz, said that supply chain constraints should improve through the first half of 2022, but the first quarter should be softer in relation to the second quarter because of the timing of Easter shipments.

The board of directors declared a $0.40/quarterly share dividend this Wednesday, which will be payable on March 25 to stockholders of record as of March 11, 2022.

Fundamentally looking, Kraft Heinz trades at less than seven times TTM EBITDA, and with a market capitalization of $44 billion, shares of this company are fairly valued. Kraft Heinz’s 4.3% dividend looks safe, and the company began the 2022 fiscal year in a strong position.

$40 represents resistance level

Kraft Heinz shares have advanced more than 5% this trading week, and if the price jumps above $40, the next target could be around $42.

On the other side, if the price falls below $34 support, it would be a “sell” signal, and we have the open way to $32.

Summary

Kraft Heinz reported its fourth-quarter results this Wednesday, and the board of directors declared a $0.40/quarterly share dividend. Kraft Heinz expects to deliver a low-single-digit percentage increase in organic net sales for the 2022 fiscal year, while CEO Miguel Patricio said that Kraft’s balance sheet is much stronger than two years ago.

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