Barclays upgrades Kellanova to Equal Weight on less cereal focus

Barclays analyst Andrew Lazar upgraded Kellanova (K) to Equal Weight from Underweight with a price target of $55, down from $57. The spinoff of the company’s North America cereal business is now “firmly in the rear view,” the analyst tells investors in a research note. The firm says Kellanova’s portfolio is now 60% snacking and 30% emerging markets focused, easing the “structural drag” of cereal. The company’s new 3%-5% sales growth target is achievable on a more consistent basis than pre spin, even if just at the lower end, contends Barclays. It thinks Kellanova should trade at a multiple somewhere above slower growth center-of-store packaged food companies, but below pure-play snacking companies like Mondelez (MDLZ).