Kellogg price target lowered to $64 from $70 at CFRA

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Kellogg shares rise after earnings beat expectations, outlook raised

Kellogg Co. shares rose 4.1% in Thursday premarket trading after the food company reported first-quarter earnings and sales that beat expectations and a guidance increase. Net income totaled $444 million, or $1.27 per share, up from $266 million, or 75 cents per share, the previous year. Currency-neutral adjusted EPS was $1.19. Revenue totaled $3.4 billion, up from $3.2 billion last year. The FactSet consensus was for EPS of $1.08 and revenue of $3.3 billion. Kellogg credited improving sales on growth in U.S. frozen foods and global Pringles and said it made progress to stabilize Special K in key markets. On May 2, Kellogg expanded its business partnership with Tolaram in West Africa with an additional $420 million investment. “Expansion in emerging markets is an important element of our growth strategy,” said Steve Cahillane, Kellogg’s chief executive. The company updated its guidance and now expects 3% to 4% net sales growth, and 9% to 11% adjusted EPS growth, both on a currency-neutral basis. Kellogg shares are down 16.7% for the year to date, while the S&P 500 index is down 1.4% for the period.

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