Kraft Heinz (KHC): Trimming Estimates But Still Above Street - RBC

November 1, 2016 6:51 AM EDT
Get Alerts KHC Hot Sheet
Price: $88.80 -0.17%

Rating Summary:
    11 Buy, 1 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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RBC Capital analyst, David Palmer, reiterated his Outperform rating on shares of Kraft Heinz Company (NASDAQ: KHC) but trimmed EPS estimates to reflect slightly weaker baseline sales trends in the US and higher dairy and coffee prices, partially offset by lower beef and pork prices.

That said, the analyst's estimates remain above consensus in 2017 and 2018 on the belief that the company's cost savings and revenue management programs will continue to deliver rapid margin and EPS growth—and ultimately pave the way to further M&A upside.

2016 and 2017 EPS estimates drop from $3.22, and $3.97 to $3.20 (+46% YOY; cons. $3.23), and $3.94 (+23% YOY; cons. $3.90). The analyst's reduced forecasts reflects 1) a modest deceleration in US scanner trends (base sales down 2.5% in 3Q versus down 2% in 2Q) and 2) higher input costs.

No change to the price target of $96 which is 22.5x 2018 EPSe of $4.27.

For an analyst ratings summary and ratings history on Kraft Heinz Company click here. For more ratings news on Kraft Heinz Company click here.

Shares of Kraft Heinz Company closed at $88.95 yesterday.

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