(AP) — Morgan Stanley analyst Matthew Grainger on Monday upgraded his rating on Kraft Foods Group Inc., saying there is still a good long-term growth story ahead for the food company.
THE OPINION: The analyst said in a research note that the company's current stock price does not fully reflect the company's potential. He said productivity and restructuring efforts should help Kraft and he expects its margins will improve over the coming years. Kraft makes Miracle Whip dressing, Oscar Mayer lunch meats and other packaged foods.
The analyst upgraded his rating to "Overweight" or "Buy," from "Equal-weight" and raised his price target to $60 from $55.
The Northfield, Ill., company reported in October a 7.3 percent boost in its quarterly net income, lifted by cost-savings measures, but revenue fell because of moves related to its split from Mondelez a year ago. Kraft is working to refresh older brands such as Grey Poupon mustard and Kool-Aid drink mix while pruning some of its less-profitable products.
THE STOCK: Shares increased 95 cents to $54.50, roughly in line with broader market activity. The stock is up about 20 percent in the year to date, underperforming the broader S&P 500 index.
