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Kellanova Co K

Morningstar Rating
$53.70 −0.46 (0.85%)
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Company Report

Kellanova Hungers for Profitable Growth, After Losing Its Appetite for U.S. Cereal

After untangling its operations, Kellanova's strategic playbook now centers almost exclusively on its global snacking portfolio. But we don't think it will abandon its focus on increasing investments in its capabilities and brands while extracting inefficiencies. In this context, we think it will continue to judiciously tailor its mix to expand pack size options to extend its distribution. However, management's motivation for the split lacks substance, in our view; we still see the primary driver as unlocking a higher multiple for the faster-growing snack business now that it's unencumbered from the mature North American cereal brands.

Price vs Fair Value

K is trading at a 28% discount.
Price
$53.70
Fair Value
$12.00
Uncertainty
Medium
1-Star Price
$378.78
5-Star Price
$87.50
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Kellanova's European arm has shown it can win even in an intensely competitive landscape, where private label has pronounced share and retail consolidation has run rampant. This is evidenced by the segment's 23 consecutive quarters of organic sales growth.

Bears

Like peers, Kellanova has strained to keep up with the rapid evolution of consumer trends, weighing on volume growth.

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News

Trading Information

Previous Close Price
$54.16
Day Range
$53.4454.21
52-Week Range
$47.6370.11
Bid/Ask
$53.69 / $53.99
Market Cap
$18.39 Bil
Volume/Avg
1.6 Mil / 2.9 Mil

Key Statistics

Price/Earnings (Normalized)
12.49
Price/Sales
1.17
Dividend Yield
4.36%
Dividend Yield (Forward)
4.17%
Total Yield
4.36%

Company Profile

Following its split from the North American cereal business, Kellanova (previously the global snacking arm of Kellogg) is a leading global manufacturer and marketer of salty snacks, snack bars, frozen breakfast fare, meat alternatives, and other packaged foods. Its offerings are manufactured in around 20 countries and marketed in more than 180 countries. Its product mix includes well-known brands such as Pringles, Cheez-It, Rice Krispies Treats, Pop-Tarts, Eggo, Nutri-Grain, and Morningstar Farms. Sales beyond its home turf account for about half of Kellanova's consolidated sales base.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Mid Value
Total Number of Employees
30,000

Competitors

Valuation

Metric
K
CPB
PEP
Price/Earnings (Normalized)
12.4914.8022.06
Price/Book Value
4.553.4112.11
Price/Sales
1.171.392.50
Price/Cash Flow
10.739.8516.72
Price/Earnings
K
CPB
PEP

Financial Strength

Metric
K
CPB
PEP
Quick Ratio
0.460.350.68
Current Ratio
0.760.970.88
Interest Coverage
4.046.4912.87
Quick Ratio
K
CPB
PEP

Profitability

Metric
K
CPB
PEP
Return on Assets (Normalized)
7.99%7.16%10.91%
Return on Equity (Normalized)
36.61%23.99%57.89%
Return on Invested Capital (Normalized)
13.80%12.02%18.52%
Return on Assets
K
CPB
PEP

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