Kraft Foods Price Target Raised by Bank of America


Published Date : Dec 23, 2014

According to a latest news report on Wednesday, the price targets have been raised on Kraft Foods Group Inc (KRFT 0%) by Bank of America. 

Kraft shares were expected to do better than its peers over the next six months, said a group of analysts led by Bryan S. Spillane. Strongly driven by improved earnings starting in 4Q14E and great management to announce the value enhancing alterations to its early ’15, the company share prices were quoted for a high outcome. 

However, the results have been mixed “3Q14 YTD noted Spillane. The company is to deliver 12 percent despite free cash flow rating below expectations and EPS growth in gross margins through easy comparisons.  

The price has been increased from $64 to $66 and has maintained a Buy rating altogether. 

High prices have stuck the growth. Expectations with improved performance in 4Q and 1H15 should nearly boost the gross margins agreeing to more productivity through the P&L. Through free cash flow improvements, certain potential set ups have been made to shareholders next year. 

According to the analysts, the company is in the position of early stages improvement of a multiyear cycle pertaining to the productivity gains. This factor will enable it to increase in marketing and concurrent drop to drive constant mid-single-digit profit growth and dividend growth. 

The initial $66 price target was set on 17.8x - which is a premium to Kraft’s food peers (FY16E EPS of $3.72). 

Recently, Kraft Foods traded at $59.97 with a decline of 0.22 percent.