Why is Kellogg So Cheap?

Just as it’s sweetening the offer.

Andrew Willis 25 June, 2021 | 4:28AM
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Andrew Willis: When consumers were stocking up in the lockdown, packaged food companies like Kellogg benefitted from higher demand for essential fare. But as lockdowns lift, travel increases, and we have fewer homemade meals to make, where will it leave cereals?

Purchased on the go, perhaps. And Kellogg would be the one to make it happen. At a cost of over a billion dollars annually, sector director Erin Lash predicts the company is about to spend big on research, development and marketing. She also expects low-single-digit annual sales growth and high-teens operating margins over the next decade.

Even amidst a challenging economic landscape, the company’s tackling unrelenting competition head-on with a long-term focus we like. From Eggo Waffles to Pringles and Cheez-Its – this is how brands stay top of mind and centre stage at the store.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Kellogg Co63.61 USD0.30Rating

About Author

Andrew Willis

Andrew Willis  is Content Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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