Kellanova (K), headquartered in Chicago, Illinois, manufactures and markets snacks and convenience foods. Valued at $27.7 billion by market cap, the company offers snack products such as snacking, cereal, noodles, plant-based foods, and frozen breakfast with online delivery services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and Kellanova perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the packaged goods industry. Kellanova's diverse and recognized brand portfolio, including Pringles, Cheez-It, and Eggo, provides a strong market presence and consumer loyalty. With products manufactured in 20 countries and marketed in over 180, the company's global footprint allows it to access different consumer markets and reduce risks from economic fluctuations in any single region.
Despite its notable strength, K slipped 1% from its 52-week high of $81.34, achieved on Nov. 12. Over the past three months, K stock declined marginally, outperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 3.7% dip during the same time frame.
In the longer term, shares of K rose 44% on a YTD basis and climbed 51.8% over the past 52 weeks, outperforming XLP’s YTD gains of 11% and 13.9% returns over the last year.
To confirm the bullish trend, K has been trading above its 200-day moving average since mid-April. The stock is trading above its 50-day moving average since early August.
K's success can be attributed to its expansive global reach and strategic use of advanced technologies like AI, ML, and data analytics. This has enabled the company to optimize operations and launch innovative products like Pringles Harvest Blends. The validation of its success was evident when its stock prices jumped over 7% after Mars announced its acquisition of K for $83.50 per share, amounting to $36 billion.
On Oct. 31, K shares closed down marginally after reporting its Q3 results. Its revenue of $3.23 billion, surpassed analyst estimates of $3.15 billion. The company’s adjusted EPS was $0.91, exceeding analyst estimates of $0.85.
K’s rival, General Mills, Inc. (GIS) shares lagged behind the stock, declining 2.4% on a YTD basis and 1.1% over the past 52 weeks.
Wall Street analysts are cautious on K’s prospects. The stock has a consensus “Hold” rating from the 16 analysts covering it, and the mean price target of $81.07 suggests a potential marginal upside from current price levels.
