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Kellogg Company Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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Simply Wall St
·4 min read
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Kellogg Company (NYSE:K) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like the results were a bit of a negative overall. While revenues of US$14b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.3% to hit US$3.63 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Kellogg

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, Kellogg's twelve analysts currently expect revenues in 2021 to be US$13.8b, approximately in line with the last 12 months. Per-share earnings are expected to increase 8.3% to US$3.95. Before this earnings report, the analysts had been forecasting revenues of US$13.7b and earnings per share (EPS) of US$3.99 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$66.95, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Kellogg analyst has a price target of US$82.00 per share, while the most pessimistic values it at US$52.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kellogg's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 0.08% revenue decline a notable change from historical growth of 1.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.3% next year. It's pretty clear that Kellogg's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kellogg going out to 2023, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Kellogg that you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.