Kellanova (K) AI Stock Analysis

• Market Cap: $28.44B
• Dividend Yield: 2.75%
• Average Volume (3M): 2.83M
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.09
• Revenue Growth: -16.16%
• EPS Growth: 41.01%
• Country: US
• Employees: 24,000
• Sector: Consumer Defensive
• Sector Strength: 96
• Industry: Food Confectioners
• EPS (TTM): 3.87
• Shares Outstanding: 345,215,900
• 10 Day Avg. Volume: 3,964,326
• 30 Day Avg. Volume: 2,832,317
• PEG Ratio: 0.52
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.23
• Price to Cash Flow (P/CF): 15.30
• P/FCF Ratio: 10.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.25
• Price Target Upside: -1.36% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

Kellanova's overall stock score of 73 reflects strong financial management and positive market momentum, bolstered by strategic corporate actions. The primary challenges include declining revenue and high leverage, which need addressing to maintain long-term health. Despite a fair valuation, the positive technical outlook and recent corporate initiatives support a moderately optimistic view.

Positive Factors

EBIT Margin

The EBIT margin improved by 200 basis points year-over-year to 13.6%, driven by lower SG&A expenses.

Regional Sales Performance

Organic sales in the AMEA region showed significant growth at 21.6%, surpassing the estimated 12.5%.

Sales Growth

Organic sales growth outperformed expectations with a 6.1% year-over-year increase compared to the estimated 3.3%.

Negative Factors

Gross Margin

Gross margin was below expectations, which led to a gross profit slightly behind the model.

Reported Sales

Despite higher organic sales, reported sales showed a decline compared to the estimate.

Kellanova Business Overview & Revenue Model

Company Description

Kellanova (K) is a prominent leader in the global food industry, specializing in the production of a wide range of packaged foods. The company operates in sectors such as cereal, snacks, and convenience foods, offering core products that include ready-to-eat cereals, snacks, and other packaged food items. Kellanova is renowned for its iconic brands that have a significant presence in households worldwide.

How the Company Makes Money

Kellanova makes money through a diverse revenue model primarily driven by the sale of its packaged food products. The company's key revenue streams include retail sales to grocery stores, supermarkets, and other food retailers, as well as direct-to-consumer sales through online platforms. Kellanova also earns revenue from strategic partnerships and licensing agreements that allow it to expand its brand reach and product offerings. Additionally, the company leverages its global supply chain and efficient production processes to maintain profitability and competitive pricing, contributing to its financial success.

Kellanova Financial Statement Overview

Summary

Kellanova demonstrates strong profitability and cash flow management, with effective operational efficiency reflected in its margins. However, the decline in revenue over recent years and high leverage present challenges. The company needs to address revenue decline while managing debt levels to sustain long-term financial health.

Income Statement

Kellanova's income statement shows a strong net profit margin of 10.54% for 2024, indicating effective cost management and revenue generation. The gross profit margin is exceptionally high at 100% in 2024, likely due to reporting issues, but historically closer to 30-35%. Revenue has declined over the years, with a notable drop from $15.3 billion in 2022 to $12.7 billion in 2024, reflecting a negative trend. However, EBIT and EBITDA margins remain healthy, suggesting operational efficiency.

Balance Sheet

The balance sheet reveals a debt-to-equity ratio of 1.68 in 2024, highlighting significant leverage. Stockholders' equity has increased, reaching $3.78 billion, contributing to a moderate equity ratio of 24.15%. Return on equity (ROE) is strong at 35.57%, indicating effective use of equity to generate profits. However, the high leverage poses potential financial risks if not managed properly.

Cash Flow

Kellanova's cash flow is strong, with an operating cash flow to net income ratio of 1.31 in 2024, signifying good cash conversion from earnings. Free cash flow has also grown significantly to $1.76 billion in 2024. The free cash flow to net income ratio is robust at 1.31, indicating efficient cash management and the ability to fund operations and growth without external financing.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
12.75B	13.12B	15.31B	14.18B	13.77B
	Gross Profit
4.54B	4.28B	4.62B	4.56B	4.73B
	EBIT
1.87B	1.50B	1.64B	1.75B	1.76B
	EBITDA
2.33B	1.76B	1.64B	2.05B	2.25B
	Net Income Common Stockholders
1.34B	951.00M	960.00M	1.49B	1.25B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
694.00M	274.00M	299.00M	286.00M	435.00M
	Total Assets
15.63B	15.62B	18.50B	18.18B	18.00B
	Total Debt
6.34B	6.53B	7.17B	7.73B	8.11B
	Net Debt
5.65B	6.25B	6.87B	7.44B	7.68B
	Total Liabilities
11.75B	12.25B	14.12B	13.96B	14.36B
	Stockholders Equity
3.77B	3.17B	3.94B	3.72B	3.11B
Cash Flow		Free Cash Flow
1.76B	968.00M	1.16B	1.15B	1.48B
	Operating Cash Flow
1.76B	1.65B	1.65B	1.70B	1.99B
	Investing Cash Flow
-750.00M	-562.00M	-448.00M	-528.00M	-585.00M
	Financing Cash Flow
-607.00M	-1.11B	-1.08B	-1.31B	-1.39B

Kellanova Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For K, the sentiment is Positive. The current price of 82.37 is above the 20-day moving average (MA) of 82.32, above the 50-day MA of 82.19, and above the 200-day MA of 77.50, indicating a bullish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 53.51 is Neutral, neither overbought nor oversold. The STOCH value of 79.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for K.

Kellanova Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDLZ	76 Outperform	$87.22B	19.67	16.69%	2.73%	1.18%	-5.47%
MKC	74 Outperform	$20.19B	25.86	14.73%	2.27%	0.40%	10.89%
K	73 Outperform	$28.44B	21.22	38.65%	2.75%	-16.16%	41.01%
HSY	71 Outperform	$33.55B	15.18	50.40%	3.29%	0.33%	20.17%
KHC	71 Outperform	$35.05B	12.99	5.56%	5.43%	-2.98%	-2.22%
GIS	66 Neutral	$31.74B	12.73	27.37%	4.16%	-2.62%	4.27%
Sector *	63 Neutral	$9.29B	14.70	4.05%	187.74%	3.97%	6.53%

Kellanova Corporate Events

Kellanova Aligns Executive Compensation with Long-Term Goals

On February 21, 2025, Kellanova’s Board of Directors made compensation decisions for its executive officers, involving the issuance of restricted stock units (RSUs). The independent board members approved RSU grants for several executives, with vesting conditions set for three years from the grant date. This move reflects Kellanova’s commitment to aligning executive compensation with long-term company performance, potentially impacting stakeholder interests by incentivizing leadership to focus on sustained growth.