S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
Investing.com - Stifel raised its price target on WK Kellogg (NYSE:KLG) to $23.00 from $18.00 on Thursday, while maintaining a Hold rating following the announcement of Ferrero’s acquisition agreement. The stock is currently trading at $22.85, near its 52-week high of $22.21, according to InvestingPro data.
Ferrero has agreed to acquire WK Kellogg in an all-cash transaction valued at $23.00 per share, representing a total takeout value of $3.1 billion. This valuation equates to approximately 13 times EV/EBITDA on a trailing 12-month basis, significantly higher than the company’s current EV/EBITDA ratio of 7.5x. InvestingPro analysis shows the company maintains a Fair overall financial health score, with particularly strong marks in profitability metrics.
The WK Kellogg board of directors has approved the offer, which now awaits shareholder approval. The W.K. Kellogg Foundation Trust and Gund Family, who collectively control 21.7% of the shareholder vote, have already expressed support for the transaction.
The acquisition is expected to close in the second half of 2025, with Stifel not anticipating any regulatory approval issues. The transaction would provide Ferrero North America with increased scale for its center-of-store business.
Stifel believes the deal would generate strong free cash flow for Ferrero following the completion of WK Kellogg’s supply chain investment cycle, prompting the firm to align its price target with the acquisition offer price.
In other recent news, Ferrero Group has announced its acquisition of WK Kellogg Co for $3.1 billion, a deal that includes iconic cereal brands like Frosted Flakes and Froot Loops. This acquisition, approved by WK Kellogg Co’s Board of Directors, is expected to close in the second half of 2025, pending shareholder and regulatory approvals. WK Kellogg Co also released preliminary second quarter 2025 results, forecasting net sales between $610 million and $615 million, and adjusted EBITDA between $43 million and $48 million. Meanwhile, Evercore ISI has adjusted its outlook on WK Kellogg stock, reducing the price target from $20.00 to $19.00, citing sales challenges and increased promotional spending. Stifel analysts have maintained a Hold rating on Kellogg Company (NYSE:K) stock, following weaker-than-expected financial results and a downward revision of the company’s full-year 2025 guidance. WK Kellogg Co’s first-quarter 2025 earnings fell short of market expectations, with an EPS of $0.20 and revenue of $663 million, both below forecasts. Despite these challenges, management remains optimistic about sequential improvement throughout 2025. The company plans to focus on strategic investments and market adaptation to navigate the evolving consumer landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.