Morgan Stanley Sees Compelling Relative Valuation at Kraft Foods Group

In a report published Tuesday, Morgan Stanley analyst Matthew Grainger reiterated an Overweight rating and $60.00 price target on

. In the report, Morgan Stanley noted, “We see compelling relative value at KRFT, currently our top pick within US food: The stock's in-line valuation of ~16x 2015e P/E vs. US peers (GIS, CPB) remains unwarranted, in our view, as KRFT offers: (i) Superior visibility to double-digit EPS growth; (ii) Strong margin expansion momentum, aided by ongoing restructuring; and (iii) Growing FCF (~$2 Bn in 2014), which supports a ~4% dividend yield and potential M&A.” Kraft Foods Group closed on Monday at $55.92.