Kellogg Company (K) lost -14.1% since Dec-18 earnings

Kellogg Company (NYSE:K) shares went down -0.76% in Thursday’s session, putting the price tag at $61.27 plus $21.13B in market capitalization. Earlier in the session, the stock traded between $60.48 and $62. Trading activity significantly improved as the volume at ready counter increased to 3,657,374 shares versus 3,085,595 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,641,594 shares. The stock is now 8.63% above against its bear-market low of $56.4 on May 02, 2018. It has retreated -22.38% since it’s 52-week high of $74.98 reached in September. Now the market price is down -9.86% on the year and down -9.87% YTD.

K’s 50 day simple moving average (SMA 50) price is $66.45 and its 200-day simple moving average (SMA 200) price is $67.14. The company’s stock currently has a total float of 344.58M shares. Its weekly volatility is hovering around 2.26% and felt 2.17% volatility in price over a month. On the upside, the share price will test short term resistance at around $62.02. On a downside, the stock is likely to find some support, which begins at $60.5. The failure to get near-term support could push it to $59.73.

Separately, it has been reported that multiple insider activity took place at Kellogg Company (K). 10% Owner Kellogg W K Foundation Trust sold 180,000 shares for $65,331,838 in transaction occurred on 2018/11/20. After making this transaction, the 10% Owner owns a direct stake of 11,203,200 shares, worth $4,000,000,000, as per the last closing price. On 2018/11/20 Khan Fareed A, CFO at K, purchased 8,190 shares at an average price of $62.14 per share. The new stake is valued at $996,863.

Chairman, Pres. & CEO/Trustee, 10% Owner, Cahillane Steven A had invested in 17,825 shares for $33,755 through a trade on 2018/11/19. Following this activity, the insider holds 1,098,555 shares worth $2,068,169 as of recent close. Wall Street’s most bullish Kellogg Company (NYSE:K) analysts are predicting the share price to blow past $90 per share during the next 12 months. The current median share price forecast by them is $66, suggesting that the stock could increase 7.72% in that time frame. The average price target of $68.65 calls for a nearly 12.05% increase in the stock price.

It had seen a negative analyst call from JP Morgan, which downgraded the stock from Overweight to Neutral on November 14. Analysts at Morgan Stanley, started covering the stock on September 17 with a Equal-Weight rating. Brokerage firm Stifel, looks cautious as they stick to prior recommendation of Buy, in a call on May 04. However, they did change the target price from $66 to $62.

When looking at valuations, Kellogg Company (K) has a cheap P/E of 11.52x as compared to industry average of 22.5x. Moreover, it trades for 14.17 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 6.98x price/book and 1.57x price/sales. Compared to others, Kellogg Company is in a different league with regards to profitability, having net margins of 13.8%. To put some perspective around this, the industry’s average net margin is 8.99%. K’s ROE is 69.7%, which is also considerably better than the industry’s ROE of 15.56%. It’s also not liquid in the near term, with a current ratio of 0.8. The stock has a debt/capital of 2.93.

Shares of Kellogg Company (K) have dropped -14.1% since the company’s last earnings report. Over the past 12 fiscal quarters, Kellogg Company (NYSE:K) has topped consensus earnings estimates in 10 quarters (83%), missed earnings in 1 quarters (8%), whereas at 1 occasion EPS met analyst expectations. K last reported earnings on October 31, 2018 when it released Sep-18 results that receded expectations. The company raked in $1.06 per share, 165% change on the same period last year. That was worse than consensus for $1.06. Revenue for the recent quarter stood at $3.47 billion, up 6% on last year and above the $3.42 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $3.19 billion to $3.38 billion, which should be compared with $3.08 billion generated last year. EPS is seen in a range of $0.86 to $0.94, against the $1.04 reported a year ago.