Kraft spinoff splits food giant in two
Kraft spinoff of its global snack operation will mean that brands including Oreo and Nabisco will be under a new label called Mondelez International Inc. The North American grocery division will carry the Kraft name after the Kraft spinoff and include Velveeta, Miracle Whip and Oscar Mayer.
Kraft¬†Foods¬†Group and Mondelez International are now trading as two separate public companies.
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."
Mondelez's stock gained 2 cents to $27.84 in Tuesday morning trading.
Shares of¬†Kraft¬†Foods¬†Group, based in Northfield, Ill., added 61 cents to $44.71.
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 thatKraft¬†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.