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Kellogg (K) Gains But Lags Market: What You Should Know

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In the latest trading session, Kellogg (K - Free Report) closed at $72.06, marking a +0.43% move from the previous day. This move lagged the S&P 500's daily gain of 1.53%. Elsewhere, the Dow gained 1.19%, while the tech-heavy Nasdaq added 0.14%.

Coming into today, shares of the maker of Frosted Flakes, Pop Tarts and Eggo waffles had lost 4.83% in the past month. In that same time, the Consumer Staples sector lost 2.59%, while the S&P 500 lost 3.1%.

Wall Street will be looking for positivity from Kellogg as it approaches its next earnings report date. In that report, analysts expect Kellogg to post earnings of $0.97 per share. This would mark a year-over-year decline of 11.01%. Meanwhile, our latest consensus estimate is calling for revenue of $3.76 billion, up 3.79% from the prior-year quarter.

K's full-year Zacks Consensus Estimates are calling for earnings of $4.12 per share and revenue of $14.82 billion. These results would represent year-over-year changes of -0.96% and +4.49%, respectively.

It is also important to note the recent changes to analyst estimates for Kellogg. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Kellogg is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Kellogg is currently trading at a Forward P/E ratio of 17.41. For comparison, its industry has an average Forward P/E of 18.22, which means Kellogg is trading at a discount to the group.

We can also see that K currently has a PEG ratio of 4.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 2.69 based on yesterday's closing prices.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 152, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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