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Kellanova (K) Hit a 52 Week High, Can the Run Continue?
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Shares of Kellanova (K - Free Report) have been strong performers lately, with the stock up 0.8% over the past month. The stock hit a new 52-week high of $81.39 in the previous session. Kellanova has gained 0.5% since the start of the year compared to the 10.7% move for the Zacks Consumer Discretionary sector and the 11.2% return for the Zacks Consumer Products - Discretionary industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, Kellanova reported EPS of $0.91 versus consensus estimate of $0.85.
For the current fiscal year, Kellanova is expected to post earnings of $3.93 per share on $12.74 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $4.03 per share on $12.98 billion in revenues. This represents a year-over-year change of 4.81% and 1.91%, respectively.
Valuation Metrics
Kellanova may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Kellanova has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.7X. On a trailing cash flow basis, the stock currently trades at 18.1X versus its peer group's average of 8.2X. Additionally, the stock has a PEG ratio of 2.49. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Kellanova currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Kellanova meets the list of requirements. Thus, it seems as though Kellanova shares could still be poised for more gains ahead.
How Does K Stack Up to the Competition?
Shares of K have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Funko, Inc. (FNKO - Free Report) . FNKO has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Funko, Inc. beat our consensus estimate by 250%, and for the current fiscal year, FNKO is expected to post earnings of $0.38 per share on revenue of $1.04 billion.
Shares of Funko, Inc. have gained 20.4% over the past month, and currently trade at a forward P/E of 36.74X and a P/CF of 267.61X.
The Consumer Products - Discretionary industry may rank in the bottom 87% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for K and FNKO, even beyond their own solid fundamental situation.
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Kellanova (K) Hit a 52 Week High, Can the Run Continue?
Shares of Kellanova (K - Free Report) have been strong performers lately, with the stock up 0.8% over the past month. The stock hit a new 52-week high of $81.39 in the previous session. Kellanova has gained 0.5% since the start of the year compared to the 10.7% move for the Zacks Consumer Discretionary sector and the 11.2% return for the Zacks Consumer Products - Discretionary industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, Kellanova reported EPS of $0.91 versus consensus estimate of $0.85.
For the current fiscal year, Kellanova is expected to post earnings of $3.93 per share on $12.74 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $4.03 per share on $12.98 billion in revenues. This represents a year-over-year change of 4.81% and 1.91%, respectively.
Valuation Metrics
Kellanova may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Kellanova has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.7X. On a trailing cash flow basis, the stock currently trades at 18.1X versus its peer group's average of 8.2X. Additionally, the stock has a PEG ratio of 2.49. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Kellanova currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Kellanova meets the list of requirements. Thus, it seems as though Kellanova shares could still be poised for more gains ahead.
How Does K Stack Up to the Competition?
Shares of K have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Funko, Inc. (FNKO - Free Report) . FNKO has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Funko, Inc. beat our consensus estimate by 250%, and for the current fiscal year, FNKO is expected to post earnings of $0.38 per share on revenue of $1.04 billion.
Shares of Funko, Inc. have gained 20.4% over the past month, and currently trade at a forward P/E of 36.74X and a P/CF of 267.61X.
The Consumer Products - Discretionary industry may rank in the bottom 87% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for K and FNKO, even beyond their own solid fundamental situation.