First day of trading for Kraft, Mondelez positive
Sun-Times staff, wire reports October 2, 2012 12:40PM
Updated: November 4, 2012 6:17AM
Kraft Foods Group and Mondelez International both enjoyed gains in their first day trading as two separate public companies Tuesday.
Shares of Kraft Foods Group (KFT), the North American grocery business that includes Velveeta, Miracle Whip and Oscar Mayer, added $1.32, or 3 percent, to close at $45.42 a share.
Shares of Mondelez (MDLZ) gained 19 cents, or 0.7 percent, to close at $28.01 Tuesday.
Kraft Foods Inc. decided to spin off its global snack business in March. That company, called Mondelez International Inc., is home to global brands including Oreo, Cadbury and Nabisco.
Scott Mushkin of Jefferies started coverage of Northfield-based 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.