- The shares of Kellogg Company (NYSE: K) have received a $78 price target from Evercore ISI. These are the details.
The shares of Kellogg Company (NYSE: K) have received a $78 price target from Evercore ISI. And Evercore ISI analyst David Palmer increased the price target on Kellogg from $72 while maintaining an “In-Line” rating on the shares.
English 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.
“Kellogg announced plans to split the company into 3 businesses, with plans to spinoff its North America Cereal and plant-based products (together 20% of 2021 sales and 13% of adj. EBITDA), while retaining its global snacking, international cereal/noodles, and North America frozen breakfast offerings,” wrote English in a research note. “Management believes this split will enable the three companies to more effectively focus on different strategic priorities; it expects tax-free spinoffs to complete by the end of 2023. We raise our 12-month price target to $76, from $70, as we now incorporate a SOTP component into our price target.”
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