NEW YORK (AP) -- A Standard & Poor's analyst on Tuesday raised his rating on Kraft Foods Inc. to "buy" from "hold," citing the packaged food giant's impending split into two publicly traded companies this year.
THE OPINION: Analyst Tom Graves said he expects a valuation boost from the split, with the North American grocery business to be "more of a dividend payer, while the global snack operation has better long-term growth potential."
He raised his price target on the company to $42 from $38.
The split by Kraft is intended to help drive growth by sharpening the focus of its business units on particular brands. The North American grocery brands will continue to carry the Kraft name and cover brands like Oscar Mayer meats and Maxwell House coffee. The other company will be called Mondelez International Inc. and focus on snack brands like Cadbury chocolates and Trident gum.
THE STOCK: Shares of Kraft, based in Northfield, Ill., rose 90 cents, or 2.4 percent, to close at $38.48.