Shares of The Kraft Heinz Company (KHC) gained 5.6% on Wednesday after the food and beverage major reported better-than-expected fourth-quarter 2021 results.
Quarterly net sales declined 3.3% year-over-year to $6.7 billion due to a fall in U.S. net sales to $4.7 billion from $5.1 billion last year. However, the overall net sales figure surpassed the consensus estimate of $6.63 billion.
Earnings of $0.79 per share indicate a fall of 1.3% year-over-year but were able to beat Street’s expectations of $0.63 per share. Moreover, adjusted EBITDA declined 10.2% to $1.6 billion.
For full-year 2021, the company reported a slight decline in sales to $26 billion, compared to $26.2 billion in 2020. Adjusted earnings rose 1.7% to $2.93 per share.
The CEO of Kraft Heinz, Miguel Patricio, said, “We are generating efficiencies to fuel incremental investments in our business, which, along with successful pricing, are mitigating inflationary pressures. I’m proud of our incredible team and have great confidence that we will build on our momentum in 2022.”
Kraft Heinz expects to perform strongly in 2022. It projects low-single-digit percentage year-over-year increase in organic net sales on continued stronger consumption compared to pre-pandemic levels. Adjusted EBITDA is expected to be in the range of $5.8 billion to $6 billion.
Wall Street’s Take
Following the release, Jefferies analyst Robert Dickerson assigned a Hold rating on the stock with a price target of $40, which implies upside potential of 9.2% from current levels.
Dickerson said, “The FY’22 outlook is tilted a bit more to H2 than expected, but given the timing of pricing vs. costs (an ongoing theme in food) and H1-weighted supply chain complexity and constraints, the market should not have found the year’s split that shocking.”
Consensus among analysts is a Hold based on 4 Holds. The Kraft Heinz stock price prediction of $38.25 implies upside potential of 4.5% from current levels.
News Sentiment for Kraft Heinz is Very Positive based on 49 articles over the past seven days. All the articles have Bullish sentiment, compared to a sector average of 64%, and none have Bearish Sentiment, compared to a sector average of 36%.
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