K - Kellogg's breakup plans benefit snacks business add concerns on costs

The separation of the Kellogg Company’s (NYSE:K) underlying snacks, cereal, and plant-based food businesses should offer a short term boost to shares, according to analysts. However, there are also longer term concerns that Wall Street is advising cognizance of. On the positive end, Evercore ISI analyst David Palmer indicated that the separation should place a premium valuation on the fast-growing snacks business that has been underappreciated when mixed in with the slowing cereal business. He surmised that the new business may see a premium closer to that of Mondelez (MDLZ), raising his sum-of-the-parts valuation for Kellogg’s (K) to $78 from his previous target of $72.  While slower growth is anticipated for the cereal business as compared to snacks, Morgan Stanley analyst Pamela Kaufman advised the separation offers greater flexibility to focus on market share and top line growth. As such, she expected there “modest low-single-digits upside to the current share

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Kellogg’s breakup plans benefit snacks business, add concerns on costs