WK Kellogg Co, the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Robert Moskow from TD Cowen upgraded the rating on the stock to a Hold and gave it a $23.00 price target.
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Robert Moskow has given his Hold rating due to a combination of factors surrounding WK Kellogg Co’s recent acquisition announcement and financial performance. The company is set to be acquired by Ferrero for $23 per share, which is a significant premium over its recent trading value. This acquisition is expected to enhance Ferrero’s presence in the North American packaged foods market, building on its previous acquisitions. However, the deal is still pending regulatory approvals and is anticipated to close in the latter half of 2025.
Despite the acquisition news, WK Kellogg Co reported disappointing second-quarter financial results, with sales and EBITDA falling short of expectations. Consequently, Moskow adjusted his forecasts for the company’s future financial performance, lowering the 2025 and 2026 EBITDA estimates. The valuation of the acquisition, based on the company’s recent EBITDA figures, is higher than the average trading multiples of comparable companies, suggesting that the stock’s current price fairly reflects its value under the acquisition terms. These factors contribute to Moskow’s Hold rating, indicating a balanced view of potential risks and rewards.
In another report released today, Exane BNP Paribas also upgraded the stock to a Hold with a $23.00 price target.