WK Kellogg Co (KLG) AI Stock Analysis

• Market Cap: $1.36B
• Dividend Yield: 4.2%
• Average Volume (3M): 756.64K
• Price to Earnings (P/E): 24.4
• Beta (1Y): 0.37
• Revenue Growth: -3.13%
• EPS Growth: -51.41%
• Country: US
• Employees: 3,280
• Sector: Consumer Defensive
• Sector Strength: 66
• Industry: Packaged Foods
• EPS (TTM): 0.20
• Shares Outstanding: 86,262,726
• 10 Day Avg. Volume: 844,531
• 30 Day Avg. Volume: 756,638
• PEG Ratio: 0.17
• Price to Book (P/B): 2.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -81.05
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 1.90
• Enterprise Value/Ebitda: 1.34
• 1Y Price Target: $16.71
• Price Target Upside: 6.37% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7

• Rating: 52 Neutral
• Price Target: $16.00 ▲(1.85%Upside)

WK Kellogg Co's overall stock score is primarily impacted by its financial performance challenges, including high leverage and negative free cash flow. Technical analysis further indicates bearish momentum, and while the valuation shows some income potential, the high P/E ratio suggests overvaluation concerns. The mixed sentiment from the earnings call reflects both strategic adjustments and ongoing market challenges.

Positive Factors

Supply Chain Modernization

Management said that they remain on track with their supply chain modernization initiative to deliver 500 bps of EBITDA margin expansion from the 2023 base by 4Q26.

Negative Factors

Market Share Losses

Market share declines suggest that the spin-off has not yet improved the company's competitiveness in the structurally declining breakfast cereal category.

Organic Sales Decline

Organic sales declined 5.6% and share declined owing to consumers shifting to healthier options and value shopping.

Sales and EBITDA Guidance Cut

Management lowered sales guidance by 100-200 bps to -2% to -3%, and EBITDA growth by 600 bps to -2% to 0%.

Weak Earnings Visibility

Earnings visibility is low as weak category trends and ongoing market share losses may hinder KLG's ability to execute on margin expansion targets.

WK Kellogg Co Business Overview & Revenue Model

Company Description

WK Kellogg Co (KLG) is a leading food manufacturing company renowned for its extensive portfolio of breakfast cereals and convenience foods. Operating primarily in the Consumer Packaged Goods (CPG) sector, the company is known for its innovative approaches to producing high-quality, nutritious food products. Its core offerings include a wide range of cereal brands, snacks, and plant-based foods that cater to diverse dietary preferences and lifestyles.

How the Company Makes Money

WK Kellogg Co generates revenue through the production, marketing, and distribution of its cereal and convenience food products. The company's primary revenue streams stem from the sale of these products to retailers and through direct-to-consumer channels. Additionally, strategic partnerships and collaborations with other food and beverage companies, as well as an expansive supply chain network, play a significant role in driving profitability. By leveraging brand recognition, product innovation, and targeted marketing strategies, WK Kellogg Co maintains a competitive edge in the global food industry.

WK Kellogg Co Financial Statement Overview

Summary

WK Kellogg Co faces significant challenges in financial performance, indicated by declining revenue growth, high leverage, and negative free cash flow. While gross profitability is stable, the high debt levels and decreasing net margins impact financial flexibility.

Income Statement

The income statement reveals a mixed performance for WK Kellogg Co. The TTM (Trailing-Twelve-Months) shows a slight decline in revenue compared to previous annual figures. Gross profit margin is stable at around 29.1%, but net profit margin has been under pressure, decreasing to 2.1% TTM from 2.7% annual. There is a notable weakness in revenue growth, indicating challenges in expanding sales.

Balance Sheet

WK Kellogg Co has a debt-to-equity ratio of 2.19 TTM, indicating a high level of leverage, which poses a risk in terms of financial stability. The equity ratio is low at 16.2%, suggesting reliance on debt financing. Return on Equity (ROE) has decreased to 17.4% TTM from 22.7% annual, reflecting reduced profitability relative to shareholder equity.

Cash Flow

Cash flow analysis shows challenges in generating free cash flow, with a negative free cash flow of $92 million TTM. The operating cash flow to net income ratio is 1.54, indicating adequate cash generation relative to net earnings. However, the decline in free cash flow growth and negative free cash flow position highlight liquidity concerns.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.66B	2.71B	2.76B	2.67B	2.46B	2.87B
	Gross Profit
776.00M	797.00M	754.00M	633.00M	576.00M	835.00M
	EBIT
90.00M	109.00M	92.00M	74.00M	37.00M	196.00M
	EBITDA
165.00M	198.00M	221.00M	42.00M	283.00M	265.00M
	Net Income Common Stockholders
57.00M	72.00M	110.00M	-63.00M	162.00M	182.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.00M	40.00M	89.00M	-8.00M	-8.00M	0.00
	Total Assets
2.02B	1.96B	1.89B	1.44B	1.24B	1.26B
	Total Debt
717.00M	648.00M	499.00M	8.00M	8.00M	0.00
	Net Debt
690.00M	608.00M	410.00M	16.00M	16.00M	0.00
	Total Liabilities
1.69B	1.65B	1.59B	749.00M	674.00M	765.00M
	Stockholders Equity
327.00M	317.00M	300.00M	687.00M	570.00M	494.00M
Cash Flow		Free Cash Flow
-92.00M	-29.00M	272.00M	-18.00M	-68.00M	216.00M
	Operating Cash Flow
88.00M	100.00M	422.00M	53.00M	7.00M	303.00M
	Investing Cash Flow
-180.00M	-129.00M	-146.00M	-71.00M	-75.00M	-87.00M
	Financing Cash Flow
52.00M	-16.00M	-188.00M	18.00M	68.00M	-216.00M

WK Kellogg Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLG, the sentiment is Negative. The current price of 15.71 is below the 20-day moving average (MA) of 16.14, below the 50-day MA of 17.24, and below the 200-day MA of 17.74, indicating a bearish trend. The MACD of -0.49 indicates Negative momentum. The RSI at 38.02 is Neutral, neither overbought nor oversold. The STOCH value of 37.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KLG.

WK Kellogg Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLF	68 Neutral	$818.85M	2.93	-31.74%	―	-2.45%	100.59%
Sector *	65 Neutral	$8.75B	15.13	4.69%	4.84%	3.64%	-2.51%
UTZ	61 Neutral	$1.86B	41.08	3.93%	1.86%	-1.29%	―
JJSF	58 Neutral	$2.17B	28.71	8.20%	2.79%	0.49%	-12.32%
THS	54 Neutral	$1.03B	160.74	0.43%	―	-3.37%	-65.26%
KLG	52 Neutral	$1.36B	24.36	17.70%	4.20%	-3.13%	-51.41%
WEST	51 Neutral	$597.19M	―	-23.58%	―	2.38%	-30.88%

WK Kellogg Co Corporate Events

WK Kellogg Co Reports Q1 2025 Financial Decline

On May 1, 2025, WK Kellogg Co held its Annual General Meeting, where Michael Corbo, Ramón Murguía, and Mindy Sherwood were re-elected as directors. Additionally, an advisory resolution to approve executive compensation and the ratification of PwC as the independent accounting firm were approved. On May 6, 2025, the company reported a 6.2% decrease in net sales and a 45.5% drop in net income for the first quarter of 2025, leading to a revised financial outlook for the year. Despite these challenges, the company remains focused on strategic priorities and sees positive consumer trends towards health and nutrition.