Robert Dickerson, an analyst from Jefferies, reiterated the Hold rating on Kellanova (K – Research Report). The associated price target was raised to $55.00.
Robert Dickerson has given his Hold rating due to a combination of factors affecting Kellanova’s stock. His assessment acknowledges that while Kellanova experienced a decrease in U.S. retail volumes by approximately 5.5% in the first quarter, there was a slight improvement in March with a reduction to 2%. However, this marginal volume uptick came at a significant price, with the company’s pricing strategy decelerating around 400 basis points, leading to negative figures in the month. This pricing adjustment was a response to returning to standard levels of merchandise activity, yet it raises concerns regarding the depth of promotional activities needed to drive volume growth, especially in the context of consumers increasingly seeking value and the elevated price points that currently prevail in the market.
Furthermore, Dickerson’s analysis suggests that the pressure faced by Kellanova in the U.S. market could pose a risk to the company’s long-term growth algorithm, which is a critical factor for investors looking at future performance. The report implies that the company’s strategy to normalize merchandise activity and address the value-seeking consumer behavior may not be sufficient to ensure a robust growth trajectory. As a result, the Hold rating reflects a cautious stance, recognizing the potential challenges Kellanova may encounter in achieving volume growth without compromising profitability.
In another report released on April 11, Citi also maintained a Hold rating on the stock with a $60.00 price target.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Kellanova (K) Company Description:
Kellogg Co. engages in the manufacturing, marketing, and distribution of ready-to-eat cereal and convenience foods. It markets cookies, crackers, crisps, and other convenience foods, under brands such as Kellogg’s, Keebler, Cheez-It, Pringles, Murray, Austin and Famous Amos, to supermarkets in the U.S. It operates through the following seven segments: North America, Europe, Latin America, and AMEA. The North America segment includes U.S. Frozen, Kashi company, and RX businesses. The Europe segment consists of European countries. The Latin America segment comprises of Central America and Mexico. The AMEA segment consists of Africa, Middle East, Australia and other Asian and Pacific markets. The company was founded by Will Keith Kellogg in 1906 and is headquartered in Battle Creek, MI.
