uploads///Stock Performance of Kellogg and Peers

What Can Investors Expect from Kellogg’s 1Q16 Results?



Revenue and EPS estimates

Kellogg Company (K) is headquartered in Battle Creek, Michigan. It’s set to report its 1Q16 results on May 5. A press release will be issued before the Market opens. Management will discuss the results over a call after the opening bell. Its earnings and revenue are expected to decline in fiscal 1Q16 by 5% and 3%. We’ll discuss the estimates more in the next part of the series.

The company manufactures and markets ready-to-eat cereal and convenience foods. Its key brands include Kellogg’s, Keebler, Cheez-It, Murray, Austin, and Famous Amos.

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How much has Kellogg gained since 4Q15?

Kellogg stock has gained 4% since its 4Q15 earnings release on February 11. The stock rose 4% after the company reported its fiscal 4Q15 results. The company beat earnings estimates by 5%. Its revenue missed estimates by a mere 0.5%. For fiscal 2015, the earnings and revenue each fell by 7%, respectively. So far, the stock has gained 7% in 2016. It fell as much as 10% in fiscal 2015. It outperformed the Market, represented by the S&P 500 Index, by ~3% as of April 27.

Peers’ stock performance

Kellogg is part of the processed and packaged goods industry. It has a market cap of $26.92 billion. Kellogg’s largest customer is Walmart (WMT). So far, Walmart returned 13.2% in 2016. Its peers in the industry include General Mills (GIS), Mondelez International (MDLZ), and Kraft Heinz (KHC). So far in 2016, General Mills has returned 6.0%. Mondelez has returned -2.1%. Kraft Heinz has returned ~9%, respectively.

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General Mills, Mondelez, and Kraft Heinz closed trade at $61.13, $43.8, and $79.1, respectively, on April 27. The PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invests 2.2% of its portfolio in Kellogg. The PowerShares High Yield Equity Divide (PEY) invests 1.7% of its portfolio in Kellogg.

What’s in the series?

In this pre-earnings release for Kellogg, we’ll cover analysts’ revenue estimates, earnings per share, and what could impact the revenue and earnings. We’ll also do a quick recap of how the company ended fiscal 2015. We’ll look at the company’s cash flow guidance, its dividend paid, and its vision for 2020. Finally, we’ll look at the company’s valuation, Wall Street analysts’ recommendations over the next 12 months, and the moving averages.


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