Kraft Heinz Earnings: Despite Muted Sales, Sequential Volume Uptick Signals Merits of Brand Spending

We saw promising features in Kraft Heinz’s first-quarter results despite the market’s displeasure (with the shares down by a mid- to high-single-digit percentage intraday). Even as it navigates a challenging landscape, management stuck to its 2024 forecast for flat to 2% organic sales growth and $3.01-$3.07 in adjusted earnings per share, which squares with our outlook. As such, we see little impetus to change our $54 fair value estimate, outside of time value. With the shares trading about 35% below our intrinsic valuation, we think investors should consider stocking up on this no-moat name.