Kellogg Company manufactures and markets ready-to-eat cereal and convenience foods. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, and Asia Pacific segments. The company was founded in 1906 and is based in Battle Creek, Michigan.
K Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for K, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Kellogg Co ranked in the 38th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Kellogg Co, consider:
The compound growth rate in the free cash flow of Kellogg Co over the past 5.68 years is 0.02%; that's higher than only 20.64% of free cash flow generating stocks in the Consumer Defensive sector.
Kellogg Co's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 8.7% of tickers in our DCF set.
K's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 8.7% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
WMT, CWGL, MDLZ, AGFS, and CHD can be thought of as valuation peers to K, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
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