Results: WK Kellogg Co Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that WK Kellogg Co (NYSE:KLG) released its first-quarter result to the market. The early response was not positive, with shares down 7.6% to US$21.97 in the past week. WK Kellogg Co reported US$707m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.37 beat expectations, being 7.2% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for WK Kellogg Co

earnings-and-revenue-growth

Taking into account the latest results, WK Kellogg Co's nine analysts currently expect revenues in 2024 to be US$2.72b, approximately in line with the last 12 months. Per-share earnings are expected to rise 8.6% to US$1.51. Before this earnings report, the analysts had been forecasting revenues of US$2.72b and earnings per share (EPS) of US$1.44 in 2024. So the consensus seems to have become somewhat more optimistic on WK Kellogg Co's earnings potential following these results.

The consensus price target rose 13% to US$21.64, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic WK Kellogg Co analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$15.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would also point out that the forecast 1.5% annualised revenue decline to the end of 2024 is roughly in line with the historical trend, which saw revenues shrink 1.4% annually over the past year Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 2.9% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect WK Kellogg Co to suffer worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around WK Kellogg Co's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for WK Kellogg Co going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for WK Kellogg Co that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.