Kellogg Upgraded to “Outperform” at Wells Fargo (K)

Cereal maker Kellogg Company ( K ) on Friday saw its rating and price target boosted on Friday by analysts at Wells Fargo. The firm said it upgraded K from “Market Perform” to “Outperform,” while boosting its valuation range from $51-$53 to $58-$60. That new target implies up to a 14% upside to the stock’s Thursday closing price of $52.52. A Wells analyst commented, “We expect Kellogg’s shares to appreciate as earnings surprise to the upside driven by a faster-than-expected recovery in its core N.A. retail cereal business. Kellogg enters 2011 with a 25% increase in new products versus 2009-2010 levels, increased investment in its supply chain, easy comparisons and list price increases already implemented to help cover surging input costs…our 2011E EPS to $3.50 from $3.40 (versus $3.46 consensus) and our 2012 estimate from $3.75 to $3.85 (versus $3.79 consensus) as a result.” Kellogg shares posted modest gains in premarket trading Friday. The Bottom Line We have been recommending shares of Kellogg ( K ) since Nov.3, 2010, when the stock was trading at $49.69. The company has a 3.08% dividend yield, based on last night’s closing stock price of $52.52. Kellogg Company ( K ) is a “Recommended” dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Kellogg Upgraded to “Outperform” at Wells Fargo (K)

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