Ahead of the Bell: Kraft, Mondelez to trade
NEW YORK (AP) — Kraft Foods Group and Mondelez International are set to begin trading as two separate public companies on Tuesday.
Kraft Foods Inc. decided to spin off its global snack business in March. That company, called Mondelez International Inc., will be home to global brands including Oreo, Cadbury and Nabisco and trade under the ticker "MDLZ."
The North American grocery business will continue to carry the name Kraft and include Velveeta, Miracle Whip and Oscar Mayer. Its ticker will change to "KRFT" from "KFT"
Scott Mushkin of Jefferies started coverage of Kraft Foods Group Inc. with a "Buy" rating and $50 price target. The analyst said while the company only runs in the slower growing North American market, it is a shareholder friendly operator with strong brands.
"Management's strong track record in the consumer products space gives us confidence that it can execute on the ambitious plans for Kraft," Mushkin wrote in a client note.
Citi Investment Research's David Driscoll gave Kraft Foods Group a "Neutral" rating and $48 price target. The analyst feels that Kraft can increase its sales by 2 percent to 3 percent and boost earnings per share by 7 percent to 9 percent over the long term by improving margins and reinvesting savings into new products and marketing.