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Jacob: What to watch for from Kraft Heinz's new strategy announcement that'll be announced very soon from CEO Miguel Patricio. First thing you want to look for earnings are going to decline a little bit before they come back up. We're looking for 2021 eps growth for Kraft Heinz of about 2.7% according to fact-set, analyst pulled by factset, but initially earnings will continue to decline. You're going to see a big reinvestment period that will not bear fruit immediately. Most of that reinvestment is going to be in the form of marketing, especially with a new distribution strategy. And that's going to be reflected in the EBITDA margin 2019 and 2020 to 23% down from about 26% in 2018 but again in 2021 hopefully we're inflecting positive there for earnings for Kraft Heinz. The other thing, asset sales and debt reduction, Kraft Heinz looking probably to sell a few businesses right now debt to 2019 expected EBITDA is five times, so that's a little bit elevated. So they're looking to sell a few businesses, and it's give me down on that debt a little bit and maybe even cut the dividend according to a Steve Law analyst. Right now, the dividend yields about 5.7% not a surprise. The stock has been down a lot, so maybe cut that dividend, have a little more cash to reinvest like I mentioned a little bit earlier.

Analysts are gearing up for Kraft-Heinz's (KHC - Get Report) 2019 announcement, and it's clear now what investors should expect. 

The stock has fallen about 34% year-to-date, with the stock trading at $27.28. Kraft-Heinz's earnings have declined over that time as it has been unable to consistently realize cost synergies from the 2015 merger that brought both units together, and failed to recognize shifting consumer preferences. 

Earnings Will Decline First 

Analysts expect heavy reinvestment in the form of marketing as the company seeks a new distribution strategy. CEO Miguel Patricio is expected to announce a new strategy soon. 

Sales for 2019 are expected to decline 3.7% in 2019 over 2018, with earnings per share expected to decline 23%, according to FactSet. The new marketing strategy is aimed at setting the company up for higher sales in 2021, but won't bear fruit until that point. Analysts are looking for 2021 EPS growth of about 2.7%. Kraft's EBITDA (earnings-before-interest-tax-depreciation-amoritization) is expected to remain at 23% through 2020, down from 26 in 2018, as sales growth will trail growth in marketing expense. 

The company says it would like to offset as much of the higher marketing spend as possible through production and supply chain efficiencies. 

Asset Sales, Debt Reduction

Kraft-Heinz wants to focus in on the businesses it can operate with the most efficiency. 

As EBITDA has declined in the past several years, the company's debt hasn't. Now, management is looking to keep only its highest potential businesses. Its debt to expected 2019 EBITDA ratio is 5 right now, relatively elevated. 

Meanwhile, management may cut the dividend, Stifel analysts wrote in a note out Monday. The dividend currently yields 5.87% to the share price, reflecting a fallen stock as the company has failed to grow earnings. Management may want to cut its dividend in order to free up cash for reinvestment that could spur earnings growth. 

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