Kraft Foods Announces Company Split, Bank of America Reiterates Buy

Bank of America has released a report on Kraft Foods KFT after the company announced its plans to split into two companies. In the report, Bank of America writes, "KFT announced plans to split itself into two companies: Global Snacks Company (Snack Co.) and North America Grocery Company (Grocery Co). In this report, we conduct a bottom up sales and profit growth analysis for the respective companies. Our bottom up analysis for Snack co. indicates that the combined Kraft and Cadbury portfolio has averaged +8% CAGR at retail – before any benefit from distribution synergies and increases in marketing investment." Bank of America reiterates its Buy rating and $40 price objective on Kraft Foods, which closed yesterday at $34.25.