Quarterly results from Kraft (NYSE: KFT) may boost traders’ appetite for exchange traded funds that invest in food stocks and consumer staples on Friday.
“Although core Kraft is performing a bit better than expected, our concern regarding Cadbury was reinforced in the first quarter,” said Deutsche Bank analysts in a note.
“While we believe in the long-term potential for snacks and confection, Kraft appears to be struggling with what cost $19 billion [over a]year ago,” they added. “We retain our hold opinion as a 4% dividend yield offsets concerns over higher leverage and lower earnings per share.”
Kraft acquired Cadbury in 2010.
The stock is a holding in Global X Food ETF (NYSEArca: EATX), Consumer Staples Select Sector SPDR Fund (NYSEArca: XLP) and Vanguard Consumer Staples ETF (NYSEArca: VDC).
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.