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Kellogg stock price prediction as shares edge lower despite solid FQ3 results

on Nov 4, 2021
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  • Kellogg shares on Thursday edged slightly lower after announcing its most recent quarterly results.
  • The company reported its fiscal Q3 results before markets opened, beating analyst expectations.
  • The stock trades at an attractive P/E ratio of about 16.53.

On Thursday, Kellogg Company (NYSE:K) shares edged lower by 1.37% despite reporting better-than-expected fiscal third-quarter results. The company announced its most recent quarterly results before markets opened, beating analyst expectations on revenue and earnings.

Kellogg posted FQ3 non-GAAP earnings per share of $1.09, beating the average for analyst expectations of $0.93. On the other hand, its GAAP EPS of $0.89 lagged the Street forecast of $0.91, while revenue for the period increased by 5.5% from the same quarter a year ago to $3.62 billion, exceeding consensus analyst expectations by $80 million.

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Kellogg shares continue to trade in a choppy pattern formation, swinging to a net gain of about 1.61% this year whilst falling 1.79% over the last 12 months.

Is Kellogg undervalued?

From an investment perspective, Kellogg shares trade at compelling trailing 12-month and forward P/E ratios of 16.53 and 15.22, respectively. Therefore, the stock could gain the attention of value investors.

On the other hand, analysts predict its earnings per share to grow by 32.90% this year before rising at an average annual rate of 3.11% over the next five years. 

Kellogg’s EPS increased at an average yearly rate of 16.60% over the previous five years, thus implying a decelerating growth.

As a result, growth investors could opt for alternatives in the market.

Source – TradingView

Technically, Kellogg shares seem to be trading within a gently descending channel formation in the intraday chart. However, the stock has recently pulled back off the 100-day moving average after finding solid resistance.

Therefore, with shares far from reaching oversold conditions, investors could target extended pullbacks at about $61.22, or lower at $59.61.

On the other hand, if the pullback ends prematurely sparking a rebound, the stock could find resistance at $64.23, or higher at $65.70.

Time to take profits?

Although Kellogg shares are down 1.61% this year, the stock recently gained 3.33% between the 29th of October and the 3rd of November. 

Therefore, with shares still far from reaching oversold conditions, the stock could fall further in the coming days. As a result, it may be time to swoop for some profits.

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