Recent accounting changes at The Kellogg Company  ( K) could begin to raise red flags with major investors, Bernstein analyst Alexia Howard wrote on Tuesday.

She reiterated her "Underperform" rating on the food manufacturing company's stock with a $62 price target.

Howard noted that in the first quarter of 2016 Kellogg began to extend payment terms to some of its customers exponentially. As a result, many investors began to question what this tactic may mean and why Kellogg alone seems to have chosen this financial plan.

The move, she added, did not impact the balance sheet nor cash flow statements as the company offset the loss in capital caused by these extensions by selling equivalent amounts of accounts receivable.

Howard "wonder(s) what (if any) will be the implications for Kellogg's top line once it stops extending incremental terms."

Shares of Kellogg's were lower over 1.75% during afternoon trading on Tuesday. 

What's Hot On TheStreet

Another bank is bullish on Alibaba: JP Morgan initiated Chinese e-commerce giant Alibaba (BABA) with an overweight rating and $190 price target in a new note Tuesday, representing more than 30% growth over Monday's closing price of $142.73. In JP Morgan's eyes, Alibaba is entering a transformation from a pure play e-commerce company to a data-driven beast that stands to power its bottom line more than most expect.

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