Morningstar Rating

Stock Research and Analysis

by Erin Lash, CFA

Bulls Say

Kellogg's efforts to extract costs seem to have some legs, and management has indicated there may be opportunities to take more capacity out of its cereal network.
In the second quarter, Special K sales turned positive for the first time after five quarters of declines, reflecting efforts to reposition the brand by touting its nutritional benefits to appeal to consumers’ desire for all-around healthy fare.
We think Pringles could help as Kellogg looks to expand its global reach and scale edge, as snack offerings are more apt to appeal to consumers around the world than cold cereal. Read more 

Bears Say

The volatile Venezuelan market accounted for 2% of Kellogg's total fiscal 2014 sales and 3% of operating income.
Lackluster innovation has plagued Kellogg in the past--particularly in Europe (innovation as a percentage of net sales plunged 50% between 2006 and 2011) as the firm unwisely focused on too many small, locally driven ideas rather than leveraging the breadth and depth that should emanate from its scale.
Kashi sales continue to trend lower, and we doubt the success of recent brand spending will become apparent until at least early fiscal 2016. Read more 


Overall, Kellogg's stewardship of shareholder capital is Standard. While the W.K. Kellogg Foundation Trust owns around 20% of the firm's outstanding shares, management has done a respectable job of allocating capital, as returns have exceeded our cost   Read more 


Founded in 1906, Kellogg is a leading global producer and marketer of cereal, cookies, crackers, and other convenience foods. The firm's offerings are manufactured in 20   Read more 

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