Sanford C. Bernstein Raises Kellogg Co. Rating to Market-Perform, Citing the Company’s Attractive Current Valuation

Kellogg Company

Kellogg Company Stock Forecast:

According to nine analysts, the average target price for Kellogg Company stock over the next 12 months is USD 70.60. The average analyst rating for the company is “Hold.” Stock Target Advisor’s analysis indicates a slightly bullish outlook, with nine positive signals and seven negative signals. As of the last closing, the stock price of Kellogg Company was USD 65.24, showing a change of -1.36% over the past week, -5.90% over the past month, and -5.26% over the last year.

Analysts Coverage Change:

Kellogg Co (K:NYE), the renowned multinational food manufacturing company, has received an upgrade from Sanford C. Bernstein & Co. (RANK #55).  Sanford C. Bernstein has raised its rating on Kellogg Co. from “Underperform” to “Market-Perform”. This upgrade reflects the market’s growing confidence in Kellogg Co’s financial performance and its potential for future growth. Let’s delve into the details of this positive development and its implications for both Kellogg Co and its investors.

Kellogg Co. News:

Kellogg’s Chairman and CEO, Steven Cahillane, remains optimistic despite the challenges faced by the food industry during the pandemic and beyond. Inflation, supply chain disruptions, high prices, labor strikes, and warehouse fires have posed significant hurdles for many food companies. However, Cahillane believes that the investor community’s pessimism is unwarranted and sees opportunities for margin expansion and retaining gained consumers.

Kellogg’s, renowned for brands like Pringles, Cheez-It, Special K, Frosted Flakes, Pop-Tarts, Corn Flakes, Rice Krispies, Eggo, Mini-Wheats, and Kashi, has successfully rebounded in recent quarters after a period of internal struggles and underperformance. The company’s net sales increased by 10% year-over-year in the first quarter of 2023 across all regions, leading to an update in its full-year financial guidance. In 2022, the Kellogg Company’s net sales exceeded $15.3 billion.

Despite the positive trajectory, Kellogg’s has faced various setbacks, particularly in its cereal operations. This includes a labor strike at its North American production facilities in late 2021, lasting three months, and a devastating fire at its Memphis cereal plant in July 2021. Moreover, the company has been challenged by changing consumer preferences, with breakfast options beyond cereal gaining popularity. Cahillane acknowledged the complexity of the current marketplace and the need to understand the state of the US consumer, as factors such as declining Supplemental Nutrition Assistance Program (SNAP) benefits impact consumer spending.

Kellogg’s restructuring plan, announced last year, aims to enhance company performance and value. By the end of 2023, the company will split into three independent public entities and spin off its North American cereal operations, capitalizing on its current momentum.

 

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