Credit Suisse Believes Kellogg Company Is Moving Too Slowly


In a report published Wednesday, Credit Suisse analyst Robert Moskow reiterated an Underperform rating and $58.00 price target on Kellogg Company (NYSE: K).

In the report, Credit Suisse noted, “Kellogg is suffering from a multi-year malaise in its core cereal business due to a lack of resonant marketing and innovation to respond to changing consumer attitudes toward nutrition and protein for breakfast. The company's announcement of a $1 billion-plus Project K restructuring program demonstrates that management is treating the issue more seriously. However, with declines only accelerating in the first half of this year, we conclude that the company is moving too slowly and with insufficient conviction to stabilize the business.

"In this report, we provide a summary of the strategic changes we would like to see Kellogg make as it prepares for 2015. While Kellogg faces enormous challenges, we do not consider them insurmountable, and we would like to ‘be there' if the turnaround gains traction. Using some rough math, we estimate that Kellogg could be worth $71/share by the end of 2015 if it addressed these deficiencies or slip into the high 50's if it maintains the status quo.”

Kellogg Company closed on Tuesday at $64.47.

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