Kellogg Is A Growth Stock On Sale, Goldman Sachs Says In Bullish Turn


Shares of Kellogg Company K continued to rise on Tuesday, after receiving an upgrade from Bernstein analyst Alexia Howard.

Even as other food companies may struggle to grow, Kellogg should be able to sustain growth "given its favorable end-market exposure and strong business momentum," according to Goldman Sachs.

The Kellogg Analyst: Jason English upgraded the rating for Kellogg to Buy, while raising the price target from $78 to $83.

The Kellogg Thesis: Concerns around stranded costs related to the planned spin-out of Kellogg’s North American cereal business has created a buying opportunity, “as it is overshadowing the underlying growth outlook for the business,” English said in the upgrade note.

Check out other analyst stock ratings.

These stranded costs are likely being “overestimated by some given that the company has already begun to burden its P&L with stand-alone public company costs as it stands up a company-within-a-company,” the analyst added.

The stock is “mispriced for the growth potential it offers investors,” English wrote. There is an “opportunity to exploit the dislocation we believe this exacerbated concern has created and recommend investors buy this secularly advantaged growth stock on sale,” he added.

K Price Action: Shares of Kellogg were up 1.9% to $66.81 at the time of publishing Tuesday.

Now Read: It's A Bear Market FOMO Bubble In Early Stage Of Collapse, Warns Hedge Fund Manager Who Foresaw 2008 Crisis

Market News and Data brought to you by Benzinga APIs
Price Target
Posted In: Analyst ColorUpgradesPrice TargetAnalyst RatingsMoversTrading IdeasExpert IdeasGoldman SachsJason English
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!