- The shares of Kellogg Company (NYSE: K) have received a $67 price target from JPMorgan. These are the details.
The shares of Kellogg Company (NYSE: K) have received a $67 price target from JPMorgan. And JPMorgan analyst Ken Goldman increased the price target on Kellogg from $64 while maintaining an “Underweight” rating on the shares.
Goldman adjusted the rating after the company announced plans to separate into 3 independent companies through two tax-free spin-offs. It includes:
1.) Global Snacking Co. – With about $11.4 billion* in net sales, will be a leading company in global snacking, international cereal and noodles, and North American frozen breakfast, with iconic, world-class brands and strong underlying growth momentum and profitability;
2.) North America Cereal Co. – With about $2.4 billion in net sales, will be a leading cereal company in the U.S., Canada, and the Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth; and
3.) Plant Co. – With about $340 million in net sales will be a leading profitable and pure-play plant-based foods company, anchored by the MorningStar Farms brand, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion.
Goldman has been generally skeptical of breakup transactions like these, noting that earnings are diluted by dis-synergies and thus multiples are required to expand for the stock to work in the near term while cash goes out the door. And Goldman pointed out that for all of the excitement created by the news, he is not sure that the breakup alters the valuation of the K stock very much.
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.