Cereal Brand Gets Soggy After Kellanova Spin-Off, Analyst Blames Headwinds On Debt
Portfolio Pulse from Priya Nigam
Shares of WK Kellogg Co (NYSE:KLG) declined after its launch as a publicly-traded company following a separation from Kellanova (NYSE:K). Goldman Sachs analyst Jason English initiated coverage of WK Kellogg with a Sell rating and a price target of $11, citing concerns about a long productivity ramp, front-loaded debt build, and a plant closure moratorium that expires in 2026.
October 03, 2023 | 3:43 pm
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NEGATIVE IMPACT
WK Kellogg Co's stock declined after its spin-off from Kellanova. Concerns about a long productivity ramp, front-loaded debt build, and a plant closure moratorium are likely to weigh on the stock.
The stock of WK Kellogg Co declined after its spin-off from Kellanova. The company is facing challenges such as a long productivity ramp and front-loaded debt build. Additionally, a plant closure moratorium that it entered into with its unions in late 2021 is currently impeding a manufacturing network rationalization. These factors are likely to negatively impact the stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Kellanova's spin-off, WK Kellogg Co, saw its stock decline after its launch as a publicly-traded company.
Kellanova spun off WK Kellogg Co, which saw its stock decline after its launch as a publicly-traded company. While the news directly impacts WK Kellogg Co, it also indirectly affects Kellanova as it reflects on the company's strategic decisions.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50