NEW YORK (AP) — Kraft's successful bid for European candy maker Cadbury could put the company in a good position to benefit from both better productivity in Europe and growth in emerging markets, a UBS analyst said Wednesday.
Analyst David Palmer and upgraded Kraft's stock to "Buy".
On Tuesday, Cadbury PLC shareholders approved Kraft Foods Inc.'s roughly $19.5 billion offer to acquire the British company.
Palmer said there are execution risks, but the odds of shares rising initially are high since the deal "incorporates a compelling European productivity story and emerging market growth potential."
The deal will allow craft to hit its share growth target of 9 percent to 11 percent, he said.
"In short, we believe the stock of the new Kraft will go up in 2010 as sentiment improves and as investors come to view Kraft as a productivity story," wrote Palmer.
He raised his rating on the stock to "Buy" from "Neutral" and raised his 12-month price target by $4 to $33.
