TD Cowen analyst Robert Moskow has maintained their neutral stance on KLG stock, giving a Hold rating yesterday.
Geoff Meacham has given his Hold rating due to a combination of factors concerning WK Kellogg Co’s current market performance and future prospects. Despite reporting better-than-expected sales and EBITDA for the fourth quarter, and raising their EBITDA guidance for 2024, Meacham remains cautious. The concerns stem from persistent structural challenges within the breakfast cereal market, the diminishing appeal of Kellogg’s brands, and the extensive work required to improve their supply chain. Nevertheless, Meacham acknowledges the company’s success in achieving its early targets post-spin and has accordingly raised the price target to $13.
The analyst expresses skepticism about the company’s sales guidance, citing a lack of conviction in management’s market share and merchandising outlook. Although the breakfast cereal category is described as stable, tracking data suggests Kellogg’s market share continues to decline, which casts doubt on their ability to regain significant market share. On a more positive note, there is strong confidence in Kellogg’s ability to generate EBITDA growth through gross margin improvements and supply chain efficiencies. However, despite these potential tailwinds, the analyst believes that the stock deserves a lower valuation multiple due to the anticipated continued volume decline in the cereal segment and the considerable investment needed to modernize the supply chain, justifying the Hold rating.
In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a $15.50 price target.
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Based on the recent corporate insider activity of 22 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of KLG in relation to earlier this year.
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WK Kellogg Co (KLG) Company Description:
WK Kellogg Co is a leading food company in the U.S., Canada, and Caribbean with a deep heritage of innovation and operational success, supported by its portfolio of trusted, beloved brands, includingKellogg¿s,Frosted Flakes,Froot Loops,Mini-Wheats,Special K,Raisin Bran,Rice Krispies,Corn Flakes,Kashi, andBear Naked, that have delighted consumers for more than a century.
Read More on KLG:
- Kellogg Enhances Executive Compensation and Severance Plans
- WK Kellogg Co Announces Strong Fourth Quarter and Full Year 2023 Financial Results, and increased 2024 EBITDA Guidance
- Notable companies reporting before tomorrow’s open
- KLG Upcoming Earnings Report: What to Expect?
- WK Kellogg Co Declares Quarterly Dividend of $0.16 per Share
