Analyst Peter Galbo of Bank of America Securities reiterated a Sell rating on WK Kellogg Co (KLG – Research Report), with a price target of $17.00.
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Peter Galbo gave his rating based on several factors that highlight challenges for WK Kellogg Co. The company’s fourth-quarter earnings for 2024 exceeded expectations, but its guidance for 2025 includes an anticipated decline in organic sales by 1%. This decline raises concerns about the company’s ability to achieve its sales targets, particularly as the initial months of 2025 have shown a notable reduction in sales volumes.
Additionally, Galbo points out that the company plans to rely heavily on innovation and brand investment to spur growth, which could be challenging given the softness in the overall category. The company also faces potential market share losses due to competitors recovering from previous setbacks. Moreover, the decision to lower the price objective to $17 reflects the company’s increased leverage and the difficult path to meeting its financial goals, leading to a valuation discount compared to peers.
In another report released yesterday, Barclays also maintained a Sell rating on the stock with a $16.00 price target.
Based on the recent corporate insider activity of 12 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.