Valued at a market cap of $27.6 billion, Kellanova (K), formerly known as Kellogg Company, manufactures and markets snacks and convenience foods. The Chicago, Illinois-based company’s principal products include snacking, cereal, noodles, plant-based foods, and frozen foods. It also offers its products under various well-known brands, including Kellogg's, Cheez-It, Pringles, Pop-Tarts, and Eggo, among others.
Companies valued at $10 billion or more are generally described as “large-cap” stocks, and Kellanova fits right into that category. The company distinguishes itself as a leading global snacking business and manufactures and markets its products in over 180 countries.
Despite a slight pullback from its 52-week high of $80.97 reached on Aug. 26, shares of this packaged food business have gained 37.3% over the past three months, dwarfing the broader Dow Jones Industrials Average’s ($DOWI) 6.9% return over the same time frame.
Moreover, in the longer term, K stock is up 44.4% on a YTD basis, significantly surpassing DOWI’s 10.1% gains. Plus, shares of K have gained 34.2% over the past 52 weeks, outperforming DOWI’s 19.9% returns over the same time frame.
To confirm its bullish trend, K has been trading above its 200-day moving average since mid-April and has remained above its 50-day moving average since August.
K’s outperformance can be attributed to strong financial performance and diversified global presence coupled with its strategic use of AI, ML, and data analytics, which has been optimizing operations and driving innovations like the Pringles Harvest Blends.
Moreover, on Aug. 1, shares of K surged 6.7% after the company reported its better-than-expected Q2 adjusted earnings of $1.01 per share and revenue of $3.2 billion, driven by an increase in sales from the North America and Latin America segments backed by significant organic growth, and improved volumes. The company’s raised full-year guidance further boosted investor confidence. Adding to the momentum, the stock took off more than 16% on Aug. 5 following the news related to M&M and Snickers maker “Mars” considering a potential acquisition of the company.
K has outpaced its rival, General Mills, Inc. (GIS), which gained 12.4% over the past 52 weeks and 14% on a YTD basis.
Despite K’s outperformance relative to the broader market, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the 17 analysts covering the stock, and as of writing, K is trading above its mean price target of $78.41.
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