WK Kellogg Co (KLG)
:KLG
US Market
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WK Kellogg Co (KLG) AI Stock Analysis

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KLG

WK Kellogg Co

(KLG)

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Neutral 57 (OpenAI - 4o)
Rating:57Neutral
Price Target:
$24.00
WK Kellogg Co's overall stock score reflects financial challenges and high valuation concerns, offset by positive technical indicators and potential strategic benefits from the merger with Ferrero. The legal challenges related to the merger add uncertainty, but the company's strong market momentum provides a positive outlook.

WK Kellogg Co (KLG) vs. SPDR S&P 500 ETF (SPY)

WK Kellogg Co Business Overview & Revenue Model

Company DescriptionWK Kellogg Co (KLG) is a leading global company in the packaged foods industry, primarily focusing on the production and distribution of ready-to-eat cereals and convenient foods. With a rich heritage and strong brand presence, the company offers a wide range of products that cater to diverse consumer preferences. WK Kellogg Co operates in several key sectors, including breakfast cereals, snacks, and plant-based foods, emphasizing innovation, sustainability, and nutrition in its product offerings.
How the Company Makes MoneyWK Kellogg Co generates revenue primarily through the sale of its branded food products, including a vast array of breakfast cereals and snacks. The company's revenue streams are driven by its extensive distribution network, which spans retail grocery stores, supermarkets, and other food service channels globally. Key factors contributing to its earnings include strong brand equity, continuous product innovation, and strategic marketing initiatives. Additionally, significant partnerships and collaborations with retailers and suppliers enhance its market reach and operational efficiency, further supporting its financial performance.

WK Kellogg Co Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlights the company's strategic adjustments to capitalize on health and wellness trends and improvements in distribution channels. However, challenges in gross margin contraction and underperformance of key brands like Special K indicate a balanced outlook.
Q1-2025 Updates
Positive Updates
Health and Wellness Trend Acceleration
Rapid acceleration in consumer interest in health and wellness brands within the ready-to-eat cereal category, seen as a long-term trend, not a fad.
Strategic Reallocation of Investments
Higher promotions reflect a strategic reallocation of the 53rd week profit, with a focus on improving return on investment for consumer-facing activities.
Supply Chain Modernization
Supply chain modernization program remains on schedule and on budget, expected to deliver 500 basis points of gross margin expansion by 2026.
Distribution Gains in Key Channels
New distribution gains in key channels are expected to contribute positively in the latter half of the year.
Negative Updates
Gross Margin Contraction
Expected gross margin contraction in the second quarter due to adjustments in manufacturing plans and inventory levels.
Decline in Special K Performance
Special K lost 40 basis points in market share, highlighting challenges in capitalizing on health and wellness credentials.
Flattish Sales Growth
Top line guide for the year adjusted to reflect flattish sales growth, with volume challenges impacting performance.
Company Guidance
During the WK Kellogg Co's First Quarter 2025 earnings call, the guidance provided highlighted several key metrics and strategic adjustments. The company noted a rapid acceleration in consumer interest in health and wellness brands within the ready-to-eat cereal category, attributing this trend to a combination of value and nutrition that appeals to current consumer sentiment. Gross margin contraction is expected in the second quarter as the company adjusts its manufacturing plan to align with revised demand forecasts. Although the category in the U.S. and Canada is providing a stable backdrop, the company maintains its 500 basis points EBITDA margin growth target by the end of 2026, indicating confidence in strategic initiatives like the supply chain modernization. This optimism is further supported by distribution gains, strategic brand investments, and relaunches, such as the Kashi brand and a new Special K protein granola. Overall, WK Kellogg Co remains focused on driving long-term value amidst a dynamic market environment, with expectations for sequential improvement in market performance throughout 2025.

WK Kellogg Co Financial Statement Overview

Summary
Income Statement
55
Neutral
Balance Sheet
60
Neutral
Cash Flow
45
Neutral
Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

WK Kellogg Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price
Price Trends
50DMA
22.96
Positive
100DMA
20.05
Positive
200DMA
19.09
Positive
Market Momentum
MACD
0.12
Positive
RSI
68.31
Neutral
STOCH
71.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLG, the sentiment is Positive. The current price of undefined is equal to the 20-day moving average (MA) of 22.97, equal to the 50-day MA of 22.96, and equal to the 200-day MA of 19.09, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 68.31 is Neutral, neither overbought nor oversold. The STOCH value of 71.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KLG.

WK Kellogg Co Peers Comparison

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Performance Comparison

WK Kellogg Co Corporate Events

M&A TransactionsLegal Proceedings
WK Kellogg Faces Legal Challenges Amid Merger Plans
Negative
Sep 9, 2025

On July 10, 2025, WK Kellogg Co entered into a merger agreement with Ferrero International S.A., with the merger expected to make WK Kellogg a wholly owned subsidiary of Ferrero. The merger has led to legal challenges from shareholders alleging misrepresentation and omission of material information in the company’s proxy statements. Despite these claims, WK Kellogg plans to proceed with the merger and has voluntarily supplemented its disclosures to address shareholder concerns.

M&A TransactionsDividendsFinancial Disclosures
WK Kellogg Co Updates Q2 2025 EBITDA Results
Neutral
Jul 31, 2025

WK Kellogg Co has updated its preliminary second quarter 2025 Adjusted EBITDA results due to a non-cash error, maintaining its net sales range of $610 million to $615 million. The company announced a merger agreement with Ferrero International S.A., with the merger expected to close in the second half of 2025, pending shareholder and regulatory approvals. Additionally, a dividend of $0.165 per share was declared, payable on September 12, 2025.

M&A TransactionsBusiness Operations and Strategy
WK Kellogg Co Announces Merger with Ferrero
Positive
Jul 10, 2025

On July 10, 2025, WK Kellogg Co entered into a merger agreement with Ferrero International S.A., where Ferrero will acquire WK Kellogg Co for $23.00 per share in cash, valuing the transaction at $3.1 billion. This acquisition is part of Ferrero’s strategic growth plan to expand its presence in North America and enhance its product offerings with WK Kellogg Co’s iconic cereal brands. The merger, which has been unanimously approved by WK Kellogg Co’s Board of Directors, is expected to close in the second half of 2025, pending shareowner and regulatory approvals. The transaction is anticipated to provide WK Kellogg Co with greater resources and flexibility to grow its brands in a competitive market.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Sep 10, 2025