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Kellanova (K)
NYSE:K
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Kellanova
(NYSE:K)
Rating:67Neutral
Price Target:
$89.00
▲(8.74%Upside)
Positive Factors
Profitability
The EBIT margin improved by 200 basis points year-over-year to 13.6%, driven by lower SG&A expenses.
Sales Performance
Organic sales growth outperformed expectations with a 6.1% year-over-year increase compared to the estimated 3.3%.
Negative Factors
Gross Margin
Gross margin was below expectations, which led to a gross profit slightly behind the model.
Reported Sales
Despite higher organic sales, reported sales showed a decline compared to the estimate.
Kellanova (K) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.49B
Dividend Yield2.76%
Average Volume (3M)3.16M
Price to Earnings (P/E)20.7
Beta (1Y)0.08
Revenue Growth-12.00%
EPS Growth49.20%
CountryUS
Employees24,000
SectorConsumer Defensive
Sector Strength77
IndustryFood Confectioners
Share Statistics
EPS (TTM)0.93
Shares Outstanding346,939,100
10 Day Avg. Volume2,848,982
30 Day Avg. Volume3,163,920
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)7.29
Price to Sales (P/S)0.00
P/FCF Ratio33.16
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue0.67
Enterprise Value/Gross Profit7.55
Enterprise Value/Ebitda4.04
Forecast
1Y Price Target
$83.38Price Target Upside1.87% Upside
Rating ConsensusHold
Number of Analyst Covering8
Kellanova Business Overview & Revenue Model
Company DescriptionKellanova (K) is a leading multinational food company specializing in the production and distribution of a wide range of packaged foods. With a focus on the convenience and snacks sector, Kellanova offers a diverse portfolio of products, including cereals, snacks, and plant-based foods. The company is committed to delivering high-quality, nutritious, and innovative food solutions that cater to the evolving preferences of consumers worldwide.
How the Company Makes MoneyKellanova makes money primarily through the sale of its packaged food products across various categories such as cereals, snacks, and plant-based foods. The company's revenue streams are diversified across different geographical regions and distribution channels, including retail, e-commerce, and food service. Key partnerships with retailers and distributors enable Kellanova to maintain a strong market presence and drive sales. Additionally, the company invests in marketing and product innovation to strengthen its brand portfolio and capture new market opportunities, contributing to its earnings.
Kellanova Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q2-2024)
| % Change Since: -0.43%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The sentiment of the earnings call is positive overall, driven by strong growth in North America and Latin America, significant margin improvements, successful innovation launches, and a raised full-year guidance. However, challenges remain in Nigeria due to currency issues and in Europe due to market elasticity.Q2-2024 Updates
Positive Updates
Strong North America Volume Growth
North America saw a return to volume growth in Q2, with improved sequential performance. Pringles led this growth with increased distribution and innovation.
Raised Full Year Guidance
Kellanova raised its full-year guidance for organic net sales growth to about 3.5% and adjusted operating profit to $1.85 billion to $1.9 billion, reflecting better-than-expected first-half performance.
Significant Margin Improvement
Operating profit margin improved, with a target of 15% by 2026. The gross profit margin increased by close to 340 basis points year-on-year in Q2.
Innovation Rebound
Kellanova launched significant innovations, such as Pringles Mingles in North America, contributing to increased consumer engagement and expected sales growth.
Latin America Performance
Organic net sales in Latin America increased by 4%, driven by growth in both snacks and cereal, particularly in Mexico.
Negative Updates
Nigeria Volume Decline
Substantial volume declines in Nigeria due to currency-driven price increases, which accounted for most of the company's overall volume decline in Q2.
European Market Challenges
Organic net sales in Europe declined slightly by less than 1% in Q2, facing tough market conditions and high elasticity in cereal categories.
Inflationary Pressures
The company faced inflationary pressures, particularly in Nigeria, impacting cost structures and necessitating further price increases.
Company Guidance
In the second quarter of 2024, Kellanova reported strong financial performance and provided updated guidance for the year. The company achieved a 4% organic growth in net sales, with a 16% increase in currency-neutral adjusted operating profit, and a 14% growth in earnings per share on a currency-neutral basis. Free cash flow also improved year-on-year. Kellanova raised its full-year guidance, now anticipating organic net sales growth of about 3.5%, with adjusted operating profit expected to fall between $1.85 billion and $1.9 billion. The guidance reflects a gross margin target of over 35% and an operating margin of about 14% for 2024, with a goal of reaching a 15% operating margin by 2026. The company's performance was driven by innovation, increased brand investment, and improved profit margins, particularly in North America, where volume growth returned.Kellanova Financial Statement Overview
Summary
Kellanova maintains strong profitability and operational efficiency, evidenced by solid margins, though revenue has been on a declining trend. The balance sheet exhibits moderate leverage, which warrants monitoring, yet the company effectively uses equity to drive profit. Cash flow operations remain stable, though slight pressure is seen in free cash flow growth, indicating areas for improvement in capital management.Income Statement
Kellanova shows a stable performance in terms of profitability with a healthy gross profit margin of 52.2% in TTM. However, the company is experiencing a negative revenue growth trend, with a decline from $15.3 billion in 2022 to $12.6 billion TTM. The net profit margin is strong at 10.9% TTM, indicating effective cost management. EBIT and EBITDA margins remain solid, underscoring operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects moderate financial leverage with a debt-to-equity ratio of 1.59, indicating a reliance on debt financing. The equity ratio stands at 25.3%, showing a reasonable equity base. Return on equity is robust at 35.2% TTM, suggesting efficient use of shareholders' equity to generate profits.70
Positive
Cash Flow
Kellanova's cash flow situation is stable, with an operating cash flow to net income ratio of 1.10, indicating good cash generation relative to earnings. Free cash flow has decreased slightly, with a negative free cash flow growth rate of -8.2%, potentially signaling caution in capital expenditures or operational efficiency improvements.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 12.63B | 12.75B | 13.12B | 15.31B | 14.18B | 13.77B | Gross Profit |
| 4.57B | 4.54B | 4.28B | 4.62B | 4.56B | 4.73B | EBIT |
| 1.91B | 1.87B | 1.50B | 1.64B | 1.75B | 1.76B | EBITDA |
| 2.34B | 2.33B | 1.76B | 1.64B | 2.05B | 2.25B | Net Income Common Stockholders |
| 1.38B | 1.34B | 951.00M | 960.00M | 1.49B | 1.25B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 330.00M | 694.00M | 274.00M | 299.00M | 286.00M | 435.00M | Total Assets |
| 15.47B | 15.63B | 15.62B | 18.50B | 18.18B | 18.00B | Total Debt |
| 6.22B | 6.34B | 6.53B | 7.17B | 7.73B | 8.11B | Net Debt |
| 5.89B | 5.65B | 6.25B | 6.87B | 7.44B | 7.68B | Total Liabilities |
| 11.45B | 11.75B | 12.25B | 14.12B | 13.96B | 14.36B | Stockholders Equity |
| 3.92B | 3.77B | 3.17B | 3.94B | 3.72B | 3.11B |
| Cash Flow | Free Cash Flow | ||||
| 863.00M | 1.13B | 968.00M | 1.16B | 1.15B | 1.48B | Operating Cash Flow |
| 1.51B | 1.76B | 1.65B | 1.65B | 1.70B | 1.99B | Investing Cash Flow |
| -569.00M | -750.00M | -562.00M | -448.00M | -528.00M | -585.00M | Financing Cash Flow |
| -862.00M | -607.00M | -1.11B | -1.08B | -1.31B | -1.39B |
Kellanova Technical Analysis
Positive
81.85
Price Trends
81.84
Positive
81.52
Positive
80.33
Positive
Market Momentum
0.03
Negative
51.51
Neutral
25.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For K, the sentiment is Positive. The current price of 81.85 is above the 20-day moving average (MA) of 81.79, above the 50-day MA of 81.84, and above the 200-day MA of 80.33, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 51.51 is Neutral, neither overbought nor oversold. The STOCH value of 25.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for K.
Kellanova Risk Analysis
Kellanova disclosed 43 risk factors in its most recent earnings report. Kellanova reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We may not complete the proposed Merger within the timeframe we anticipate or at all, which could have an adverse effect on our business, financial results and/or operations. Q4, 2024
2.
Uncertainties associated with the Merger could adversely affect our business, results of operations and financial condition. Q4, 2024
3.
Failure to complete the Merger could adversely affect our business and the market price of our shares of common stock. Q4, 2024
Kellanova Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $32.71B | 19.91 | 37.48% | 3.39% | -5.91% | -19.78% | |
72 Outperform | $87.41B | 25.09 | 13.27% | 2.72% | 0.90% | -14.60% | |
68 Neutral | $31.52B | 12.07 | 5.36% | 5.97% | -4.25% | -4.04% | |
67 Neutral | $28.49B | 20.69 | 39.05% | 2.76% | -12.00% | 49.20% | |
67 Neutral | $19.69B | 25.21 | 14.73% | 2.37% | 0.40% | 10.89% | |
65 Neutral | $8.91B | 15.03 | 4.70% | 203.30% | 3.50% | -2.63% | |
63 Neutral | $29.64B | 11.89 | 27.37% | 4.43% | -2.62% | 4.27% |
* Consumer Defensive Sector Average
Performance Comparison
K
Kellanova
81.91
23.76
40.86%
GIS
General Mills
54.61
-10.32
-15.89%
HSY
The Hershey Company
161.48
-30.63
-15.94%
MKC
McCormick & Company
73.35
6.59
9.87%
MDLZ
Mondelez International
66.63
0.50
0.76%
KHC
Kraft Heinz
26.70
-5.84
-17.95%
Kellanova Corporate Events
Executive/Board Changes
Kellanova Announces CFO Resignation and New Appointment
Neutral
May 8, 2025
On May 6, 2025, Kellanova announced the resignation of Amit Banati, the Vice Chairman and Chief Financial Officer, effective May 9, 2025, as he pursues another opportunity. The company appointed John Renwick as the acting Senior Vice President and Chief Financial Officer, effective May 9, 2025, who has been with the company since 2000 and has extensive experience in finance and investor relations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.