Kraft Heinz: Even Amid the Macro and Competitive Malaise, We Think Shares Look Tasty

With shares trading 40% below our $57 fair value estimate and boasting a 4%-5% dividend yield, we think investors should stock up on narrow-moat Kraft Heinz. During the first four years as a combined business, the firm was plagued by an outsize desire to take a hatchet to its cost structure to augment near-term profits and cash flows versus investing for the long term. However, we believe the current regime has been unwavering that cost savings aren’t just intended to aid margins but to fuel spending behind its brands and capabilities.