Kellanova’s Challenging Outlook: Hold Rating Amid Declining Sales and Sluggish Growth Projections

In a report released today, Robert Moskow from TD Cowen maintained a Hold rating on Kellanova (K – Research Report), with a price target of $83.50.

Robert Moskow has given his Hold rating due to a combination of factors impacting Kellanova’s performance. The company’s sales have shown a decline, as indicated by Nielsen retail tracking data, with a decrease of 3.7% in the U.S. and 2.2% in Europe over recent weeks. This reflects a challenging macroeconomic environment and a sluggish snacking category backdrop.
Furthermore, Moskow’s updated model for Kellanova anticipates a continuation of these trends, with limited improvement expected in the latter half of the year. The forecast for 2025 shows a modest organic sales growth of 1.1%, a significant drop from the 5.6% projected for 2024, along with a 7% decline in operating profit. These projections suggest that while there is potential for growth, the current market conditions warrant a cautious approach, justifying the Hold rating.