The firm said it lowered its rating on the ready-to-eat cereal and convenience foods manufacturer and marketer as it believes it will take Kellogg years to fix its domestic cereal business, as that sector is losing out to options consumers find more convenient and healthier, theflyonthewall.com reports.
Societe Generale reduced its price target on Kellogg to $66 from $68.50.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Separately, TheStreet Ratings team rates KELLOGG CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate KELLOGG CO (K) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, KELLOGG CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $386.00 million or 5.17% when compared to the same quarter last year. In addition, KELLOGG CO has also modestly surpassed the industry average cash flow growth rate of 2.03%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 42.52% is the gross profit margin for KELLOGG CO which we consider to be strong. Regardless of K's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.00% trails the industry average.
- K, with its decline in revenue, slightly underperformed the industry average of 3.2%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: K Ratings Report
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