Kellogg (K) Cut to Hold at Zacks Investment Research

Kellogg (NYSE:K) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report released on Monday.

According to Zacks, “Kellogg’s cost savings from its Project K and ZBB have been supporting renovation, innovation, brand support and margins. Kellogg remains on track to achieve its 2018 profit-margin goal of 18%. In order to improve its sales performance, the company is investing in brand building such as digital media, consumer promotions and traditional advertising. It is also investing in in-store capabilities like increasing the sales forces of its struggling businesses — cereals and snacks. Kellogg is also channeling funds toward product and packaging innovation as well as reformulation of many existing products to keep up with the rapidly changing views of consumers regarding health and wellness. Although cost savings are providing support for margin expansion, a weak top line is limiting Kellogg’s ability to leverage it. Meanwhile, its shares have outperformed industry in the past year and estimates are trending upward over the last 60 days.”

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Other analysts have also recently issued reports about the company. Barclays reiterated a “sell” rating and issued a $69.00 price target on shares of Kellogg in a research report on Sunday, February 11th. Bank of America upped their price target on Kellogg from $66.00 to $69.00 and gave the company an “underperform” rating in a research report on Friday, February 9th. Citigroup lowered their price target on Kellogg from $91.00 to $87.00 and set a “buy” rating on the stock in a research report on Friday, February 9th. Pivotal Research assumed coverage on Kellogg in a research report on Monday, February 5th. They issued a “buy” rating and a $80.00 price target on the stock. Finally, DZ Bank cut Kellogg from a “buy” rating to a “hold” rating in a research report on Friday, December 8th. Four analysts have rated the stock with a sell rating, nine have assigned a hold rating and six have issued a buy rating to the stock. Kellogg currently has an average rating of “Hold” and a consensus price target of $73.88.

Shares of Kellogg stock opened at $66.32 on Monday. The stock has a market capitalization of $22,971.54, a P/E ratio of 18.32, a PEG ratio of 2.04 and a beta of 0.48. The company has a current ratio of 0.68, a quick ratio of 0.41 and a debt-to-equity ratio of 3.52. Kellogg has a 1 year low of $58.76 and a 1 year high of $74.29.

Kellogg (NYSE:K) last released its quarterly earnings data on Thursday, February 8th. The company reported $0.96 earnings per share (EPS) for the quarter, meeting analysts’ consensus estimates of $0.96. The business had revenue of $3.21 billion for the quarter, compared to analysts’ expectations of $3.10 billion. Kellogg had a return on equity of 70.35% and a net margin of 9.82%. Kellogg’s quarterly revenue was up 3.6% on a year-over-year basis. During the same period in the previous year, the business posted $0.92 earnings per share. analysts predict that Kellogg will post 4.45 EPS for the current year.

Kellogg declared that its board has approved a share repurchase program on Friday, December 15th that allows the company to repurchase $1.50 billion in outstanding shares. This repurchase authorization allows the company to buy shares of its stock through open market purchases. Shares repurchase programs are usually an indication that the company’s board believes its shares are undervalued.

In other Kellogg news, major shareholder Kellogg W. K. Foundation Trust sold 205,000 shares of the business’s stock in a transaction on Thursday, March 8th. The stock was sold at an average price of $69.47, for a total value of $14,241,350.00. The transaction was disclosed in a document filed with the SEC, which is available at this link. Also, Vice Chairman Gary H. Pilnick sold 4,400 shares of the company’s stock in a transaction on Friday, February 23rd. The shares were sold at an average price of $67.55, for a total value of $297,220.00. The disclosure for this sale can be found here. In the last three months, insiders sold 623,763 shares of company stock worth $42,787,777. Insiders own 1.40% of the company’s stock.

Several institutional investors and hedge funds have recently modified their holdings of K. Nationwide Fund Advisors lifted its stake in shares of Kellogg by 26.3% during the third quarter. Nationwide Fund Advisors now owns 405,829 shares of the company’s stock valued at $25,312,000 after acquiring an additional 84,474 shares during the period. Raymond James Financial Services Advisors Inc. lifted its stake in shares of Kellogg by 19.2% during the third quarter. Raymond James Financial Services Advisors Inc. now owns 62,595 shares of the company’s stock valued at $3,904,000 after acquiring an additional 10,073 shares during the period. Sei Investments Co. lifted its stake in shares of Kellogg by 49.8% during the third quarter. Sei Investments Co. now owns 109,808 shares of the company’s stock valued at $6,848,000 after acquiring an additional 36,488 shares during the period. New York State Common Retirement Fund lifted its stake in shares of Kellogg by 1.7% during the third quarter. New York State Common Retirement Fund now owns 538,200 shares of the company’s stock valued at $33,568,000 after acquiring an additional 9,000 shares during the period. Finally, Teacher Retirement System of Texas lifted its stake in Kellogg by 11.6% in the third quarter. Teacher Retirement System of Texas now owns 8,901 shares of the company’s stock valued at $555,000 after buying an additional 926 shares during the period. 91.85% of the stock is currently owned by institutional investors and hedge funds.

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Kellogg Company Profile

Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods.

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