Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Kraft Heinz Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.0% to 0.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 30, DPO 95, DIO 69). At a 5.8% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $52.81 per share, suggesting KHC is undervalued by 144.6% at the current price of $21.59.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 3,655 | 3,678 | 3,721 | 3,709 | 3,728 | 3,822 |
| (−) Net Interest | 1,080 | 1,087 | 1,099 | 1,096 | 1,102 | 1,129 |
| (+) D&A | 932 | 926 | 919 | 895 | 868 | 889 |
| EBITDA | 5,667 | 5,691 | 5,739 | 5,699 | 5,697 | 5,840 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 876 | 881 | 891 | 889 | 893 | — |
| (−) ΔWC | -269 | 5 | 10 | -3 | 5 | — |
| Free Cash Flow (FCF) | 5,060 | 4,804 | 4,838 | 4,813 | 4,800 | — |
| Peers' EBITDA Multiple | 13.6x | |||||
| Terminal Value | 79,423 | |||||
| WACC / Discount Rate | 5.75% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,920 | 4,418 | 4,207 | 3,958 | 3,732 | 60,050 |
| Enterprise Value | 81,284 | |||||
| Projection Period | 21,234 | 26.1% | ||||
| Terminal Value | 60,050 | 73.9% | ||||
| (−) Current Net Debt | 18,604 | |||||
| Equity Value | 62,680 | |||||
| (÷) Outstanding Shares | 1187M | |||||
| Fair Price | $53 | +144.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.6x | 11.6x | 13.6x | 15.6x | 17.6x |
|---|---|---|---|---|---|
| 3.8% | $42 | $51 | $59 | $67 | $75 |
| 4.8% | $40 | $48 | $56 | $63 | $71 |
| 5.8% | $38 | $45 | $53 | $60 | $68 |
| 6.8% | $36 | $43 | $50 | $57 | $64 |
| 7.8% | $34 | $41 | $48 | $54 | $61 |
Current price: $21.59. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.