What Should Investors Know About Kellogg Company (K) Stock?

Kellogg Company logged a 0.3% change during today's morning session, and is now trading at a price of $67.29 per share. The S&P 500 index moved -1.0% and the Nasdaq posted a -0.0% change.

Kellogg Company shares moved 0.8% over the last 52 weeks, with a high of $77.17 and a low of $63.74. During this time, the stock outperformed the S&P 500 index by 9.0%. As of January 2022, the company's 50-day average price is $67.0. Kellogg Company, together with its subsidiaries, manufactures and markets snacks and convenience foods. The large-cap Consumer Staples company has 30,000 full time employees and is based in Battle Creek, MI. Kellogg Company has returned a 3.5% dividend yield over the last 12 months.

Declining EPS Growth Trend with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $13,578 $13,770 $14,181 $15,315
Revenue Growth n/a 1.41% 2.98% 8.0%
Gross Margins 32.3% 34.3% 32.2% 30.1%
Gross Margins Growth n/a 6.19% -6.12% -6.52%
Operating Margins 10.3% 12.8% 12.4% 10.7%
Operating Margins Growth n/a 24.27% -3.13% -13.71%
Net Margins 7.07% 9.08% 10.49% 6.27%
Net Margins Growth n/a 28.43% 15.53% -40.23%
Earnings Per Share $2.8 $3.63 $4.33 $2.79
EPS Growth n/a 29.64% 19.28% -35.57%
Diluted Shares (MM) 343 345 343 343
Free Cash Flow (MM) $590 $1,481 $1,148 $1,163
FCF Growth n/a 151.02% -22.48% 1.31%
Capital Expenditures (MM) -$586 -$505 -$553 -$488
Net Debt / EBITDA 3.63 2.98 2.57 3.31

Kellogg Company Is Overpriced:

Compared to the Consumer Staples sector's average of 24.36, Kellogg Company has a trailing twelve month P/E ratio of 24.1 and, according to its EPS guidance of 4.25, an expected P/E ratio of 15.8. Kellogg Company's PEG ratio is 1.48 based on its 8.7% compound average growth rate of historical and projected earnings per share. This implies that the company's shares are fairly valued.

Kellogg Company's P/B ratio is 5.8 compared to its sector average of 4.29. The company is likely overvalued in terms of its equity. The company's shares are currently trading 126.9% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 3.39 * 11.53) = $29.66

Kellogg Company Benefits From Positive Market Indicators:

17 analysts are following Kellogg Company and have set target prices ranging from $61.0 to $82.0 per share. On average, they have given the company a rating of hold. At the current price of $67.29, K is trading -7.07% away from its average analyst target price of $72.41 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 3.5% of the company's shares are tied to short positions. Institutions own 87.4% of Kellogg Company's shares, while the insider ownership rate stands at 6.84%. The biggest shareholder is Kellogg W K Foundation Trust with a 16% stake in the company worth approximately $3,763,653,430.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.