Kraft Heinz stock plunged -20% in pre-market trading Friday, a day after the company announced a write-down and revealed an ongoing Securities and Exchange Commission (SEC) investigation into its accounting policies.
The processed food giant’s Kraft and Oscar Mayer brands took a $15 billion write-down in value. Kraft Heinz also slashed its dividend by -36% to 40 cents per share, citing the need to manage its deleveraging process. According to the firm, the dividend cut would help boost returns over time.
What probably aggravated investor concerns was the disclosure by Kraft Heinz that it had received a subpoena from the SEC in October, regarding the company’s procurement accounting methods. Following the subpoena, the company began an internal investigation, as a result of which it added $25 million to the cost of products sold. The company, however, has also indicated that at present, the matter related to the subpoena should not significantly affect the firm’s earnings reported for the current or previous periods.
Kraft Heinz posted earnings of 84 cents a share on $6.89 billion in revenue for the fourth quarter 2018, thereby missing analysts’ expectations of earnings per share of 94 cents on revenue of $6.93 billion (based on Refinitiv survey).
The 10-day moving average for KHC crossed bullishly above the 50-day moving average on March 28, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where KHC advanced for three days, in of 319 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 300 cases where KHC Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for KHC moved out of overbought territory on May 01, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 34 similar instances where the indicator moved out of overbought territory. In of the 34 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 57 cases where KHC's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on May 01, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on KHC as a result. In of 73 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for KHC turned negative on May 01, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KHC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
KHC broke above its upper Bollinger Band on April 22, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.910) is normal, around the industry mean (8.292). P/E Ratio (16.043) is within average values for comparable stocks, (26.814). Projected Growth (PEG Ratio) (1.048) is also within normal values, averaging (2.471). Dividend Yield (0.043) settles around the average of (0.043) among similar stocks. P/S Ratio (1.718) is also within normal values, averaging (62.729).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. KHC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a manufacturer of packaged food products
Industry FoodSpecialtyCandy