UPDATE: Canaccord Genuity Downgrades Kraft Foods Group to Hold, Reiterates $59 PT Following Mixed Messages from Q3 Results

In a report published Thursday, Canaccord Genuity analyst Alicia Forry downgraded the rating on

from Buy to Hold, but reiterated the $59.00 price target. In the report, Canaccord Genuity noted, “Q3 results reveal a mixed message. EPS excluding a gain was $0.70, ahead of consensus of $0.68, but revenue was c. 4% light. Kraft grew volumes on an underlying basis ahead of the market (+1% vs. market -0.5%), as innovation began to pay off. However, traffic to retailers has fallen sharply in recent weeks and management sounded cautious about the consumer environment. It is reassuring that Kraft's cost savings and innovation programmes remain on track, but the retail environment is still very promotional resulting in negative pricing-net-of-cost at group level. As a result, the payoff from marketing investments is going to be slower. The upcoming SNAP funding cuts of $5bn in November are likely to add pressure to the roughly 15% of American consumers dependent on food stamps. Furthermore, the later timing of Thanksgiving this year may impact consumers' budgets heading into the holidays. It is also unclear whether the government shutdown will hurt Q4.” Kraft Foods Group closed on Wednesday at $55.44.