KLG
WK Kellogg Co
$23.00
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 1.5% above fair value
You pay
$23.00
Bear
$18.67
Fair
$22.67
Bull
$26.67
Bear
$18.67
-18.8%
$1.33 × 14x P/E
Fair
$22.67
-1.4%
$1.33 × 17x P/E
Bull
$26.67
+15.9%
$1.33 × 20x P/E
Adjust Assumptions
17.0x
1.33$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
17.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$17.75
Divergence from AlphaVal
28%
Summary
Applying a 17x P/E to adjusted EPS of $1.33, the base-case value is $22.67 per share.
Warnings
The company's reported profits differ from official accounting profits by 61%. 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 28% 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