Morgan Stanley Upgrades Kraft Heinz, Boosts Stock
by Jayson Derrick
Morgan Stanley's Dara Mohsenian upgraded Kraft Heinz from Underweight to Equal-weight with an unchanged $35 price target.
1. Management's non-key commodity inflation net of cost savings guidance appears conservative:
2. The company could see topline and commercial profit growth from $500 million in commercial investment in 2018 and 2019;
3. Expectations for positive organic sales growth and more favorable pricing; and
Foreign exchange guidance looks conservative.
4. The research firm's reverse discounted cash flow model suggests the Street is assuming Kraft Heinz will show zero long-term EBITDA growth after management's revision to fiscal 2019. The analyst said the company should be able to show a 0.3 percent long-term growth rate through fiscal 2025
Source: Benzinga
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