Jefferies Initiates Coverage On Kraft, Calls It A "Tasty Treat"

Jefferies & Co. is initiating coverage on Kraft

with a Buy rating and a $40 price target on shares. In a note to clients, Jefferies writes, "We are initiating coverage of Kraft with a Buy rating and $40 target price. Kraft's equity, in our view, is likely to outperform its peers as the benefits of the Cadbury acquisition begin to increase revenue growth, particularly in emerging markets. The merger, we believe, has clouded the improvements in the company's large North American operations where margins in many of the businesses have seen nice growth over the last 3 years." Shares of KFT gained 14 cents yesterday to close at $34.26, a gain of 0.4%.