UPDATE: Canaccord Genuity Reiterates Buy Rating, Raises PT on Kraft Foods Group on Increased Confidence

In a report published Wednesday, Canaccord Genuity analyst Alicia Forry reiterated a Buy rating on Kraft Foods Group KRFT, and raised the price target from $50.00 to $56.00. In the report, Forry noted, “We are increasing our target price (to $56 from $50) to reflect our increased confidence in the cost savings opportunity; after meeting with CEO Tony Vernon in London last week, we believe this opportunity is more substantial than we had previously expected. We see several years of improvements ahead following good initial progress on costs in Q4, the first quarter reported as a standalone company. Besides the expansion of Lean Six Sigma and de-layering the organisation (the two major sources of efficiency that we detailed in our November 2012 initiation report), the rollout of Integrated Business Planning, supply chain rationalisation, SKU rationalisation and distribution efficiencies should between them provide ample scope for margin improvement over the medium term. However, near term, we think the top-line is likely to be weak given pressure on the U.S. consumer, commodity deflation and difficult comps.” Kraft Foods Group closed on Tuesday at $51.37.