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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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
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