KLG
WK Kellogg Co
$23.00
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 8.4% below fair value
You pay
$23.00
Bear
$20.67
Fair
$25.11
Bull
$29.54
Bear
$20.67
-10.1%
$1.58 × 14x P/E
Fair
$25.11
+9.2%
$1.58 × 17x P/E
Bull
$29.54
+28.4%
$1.58 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
14.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $17.75 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $25.11 per share.
Warnings
The company's reported profits differ from official accounting profits by 91%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $17.75 (from 8 analysts). Our estimate is 52% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples