UBS Maintains a 'Buy' on Kraft Foods (KFT); A Year of Separation

UBS maintains a 'Buy' on Kraft Foods (NYSE: KFT) price target raised from $40 to $45.

UBS analyst says, "We are raising our FY12e and FY13e EPS to $2.53 (+11% YOY; cons $2.52) and $2.84 (+12% YOY; cons $2.80) respectively - to more fully reflect the margin opportunities of a streamlined distribution system for the US grocery business, diminishing input inflation, and ongoing Cadbury revenue synergies."

"Kraft remains our top pick in packaged food given our belief that the split of the company into a high margin, high dividend company (new Kraft Foods) and high growth SnackCo (mid teens EPS growth) can boost the sum of the parts valuation. While currency will likely be a drag in 2012 (UBSe -$0.10 FX impact), we believe further pricing in 1H12 and ongoing productivity initiatives should more than offset mid-single digit input inflation."

For an analyst ratings summary and ratings history on Kraft Foods click here. For more ratings news on Kraft Foods click here.

Shares of Kraft Foods closed at $38.13 yesterday.

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