WK Kellogg initiated with a Sell at Goldman Sachs

Goldman Sachs initiated coverage of WK Kellogg with a Sell rating and $11 price target after the completed separation of Kellogg’s North American cereal business. There is meaningful margin expansion opportunity for the company, as it appears to be under-earning its potential based on various benchmarking measures, the analyst tells investors in a research note. The firm adds however that while it sees near-term margin expansion potential on favorable input costs, the company’s productivity programs are likely to be back-end weighted in FY26 and partially predicated on a manufacturing network rationalization that is currently impeded by the plant closure moratorium that it entered into with its unions in late 2021.