Higher Expected Share in Gum Market Would Lift Kraft Foods’ Stock
Trefis members have created forecasts for two key drivers of Kraft Foods’s (NYSE:KFT) stock over the last week: (1) Kraft Global Market Share Chocolate & Candy and (2) Kraft Market Share in Gum. Their forecasts suggest that Kraft Global Market Share Chocolate & Candy will be roughly in line, while Kraft Market Share in Gum will trend higher than Trefis forecast. These projections suggest a combined upside of around 1-2% for Kraft Foods’ stock.
Chocolate, Candy & Gum is the most valuable division, constituting 32% of the $36 Trefis price estimate for Kraft Foods. Kraft’s market share gains in the global Chocolate, Candy and Gum may hurt competing players like PepsiCo (NYSE:PEP), General Mills (NYSE:GIS), and Kellogg (NYSE:K).
Given the importance of Chocolate, Candy and Gum businesses globally, Kraft Foods’ stock is quite sensitive to (1) Kraft Global Market Share Chocolate & Candy and (2) Kraft Market Share in Gum. Below are charts showing recent estimates created by Trefis members for the two drivers.
- How Will Coffee Prices Affect Kraft’s Beverages Business?
- Commodity Cost Pressures Weigh On Kraft’s Second Quarter Earnings
- Kraft Earnings Preview: Higher Commodity Costs, Lower Grocery Sales To Weigh On Earnings
- 3 Key Trends Impacting Our $61 Price Estimate for Kraft Foods Group
- Kraft Earnings Preview: Pricing, Cost Pressures Could Mute Earnings Growth
- Higher Commodity Costs To Weigh On Kraft’s Margins This Year
1. Kraft Global Market Share Chocolate & Candy
The average of forecasts for Kraft Global Market Share Chocolate & Candy created by Trefis members indicated a projected increase from 14.5% in 2010 to 17% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 14.9% in 2010 to 17% by the end of the Trefis forecast period. The member estimates imply very little impact to the Trefis price estimate for Kraft Foods’ stock. In the past, Kraft Global Market Share Chocolate & Candy has decreased from 5.8% in 2005 to 5.4% in 2009. The steep increase in share from 2009 to 2010 is attributable to Kraft’s acquisition of Cadbury.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Kraft Foods’ stock to Kraft Global Market Share Chocolate & Candy.
Our complete analysis for Kraft Global Market Share Chocolate & Candy is here.
The average of forecasts for Kraft Market Share in Gum created by Trefis members indicated a projected increase from 31% in 2010 to 34% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 27% in 2010 to 29% by the end of the Trefis forecast period. The member estimates imply an upside of 2% to the Trefis price estimate for Kraft Foods’s stock. Before Kraft’s acquisition of Cadbury, the company’s Market Share in Gum was under 1%.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Kraft Foods’s stock to Kraft Market Share in Gum.