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Argus remains constructive on Kellogg Company (NYSE:KY) ahead of the Q3 earnings season in the food sector.
Analyst Chris Graja and team say Kellogg management is well aware of the challenges the company faces. changing food perception, changing shopping habits and changing retail environment. He also notes that Kellogg (KY) has reduced costs even as it focuses on growth initiatives and creating shareholder value.
Of particular interest, Kellogg (KY) will be leaner after announcing that it is discontinuing the North American grain business and the plant-based food business led by MorningStar Farms. Kellogg (KY) is expected to complete the transactions by the end of 2023 and provide an update on the organizational structure and management in Q1 2023.
“We love the proposed spinoff plan. While many investors appreciate K’s beta of approximately 0.5, we have always felt that investors are not fully appreciating the value. increased by MorningStar Farms and great snack brands like Pringles.”
Argus has a Buy rating on Kellogg (KY) and a price target of $85.
Kellogg’s stock (KY) Rose 0.29% on Monday to $69.85 on a day that investors gnawing on food reserves amid widespread market weakness.
