My Kraft Share Price Target: Analyst

Kraft’s third quarter profit beat Wall Street expectations, but the company posted weaker-than-expected revenue and cut its full-year sales forecast on Tuesday. Timothy Ramey, vice president and senior research analyst at D.A. Davidson & Co. shared his analysis on the firm’s earnings.

Kraft Earnings Analysis
Kraft Earnings Analysis   

“The market is really hoping that Kraft shows some signs of organic growth, and organic growth was only up a half a percent this quarter, so it stalled out,” Ramey told CNBC. “[It] certainly had great margin expansion, but the topline was pretty anemic.”

Ramey has a “buy” rating on Kraft and has a $33 price target in the next 12 to 18 months. His 5-year price target for the company is $45.

“I did maintain the buy—I don’t feel it’s a very high conviction buy, but the stock is cheap,” he said. “It has a 4 percent dividend yield.”

The world’s second largest food company also announced on Tuesday that it will not overpay for Britain’s Cadbury.

“Paradoxically, this announcement makes it less likely that [Kraft] will go out and do something ill-advised on Cadbury,” he said.

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Ramey has investment clients who own shares of Kraft.