Citigroup (NYSE: C) maintained its “Buy” rating on Kraft Foods (NYSE: KFT) and kept its $23.00 price target as the company remains optimistic about Kraft’s recent acquisition of Cadbury and sees growth ahead for the company in 2010.
Analyst David Driscoll said, “We cont. to remain bullish on the Cadbury acq. as it represents a premium name in confection and provides KFT with meaningful revenue & cost synergy opportunities. Finally, KFT’s legacy business truly looks to be turning a corner and we are confident of KFT delivering growth in 2010.
Driscoll continued, “KFT continues to appear attractive from a valuation standpoint as the stock currently trades at a 1pt multiple disc. to its peer group at 12.7x 2011 EPS est.’s. Given the significant cost/revenue synergy targets, combined with favorable growth prospect in Emerging Markets (25% of Sx’s), we find today’s valuation an attractive entry point on the stock.”
