Kellogg will shine in an increasingly tough environment for the food industry, according to Goldman Sachs. The bank upgraded Kellogg to buy and raised its price target to $83 from $78. The new target implies upside of roughly 27% from Monday’s close. Analyst Jason English said that as inflation helped food companies grow exceptionally in recent years due to higher pricing power, lower growth now threatens that acceleration. Kellogg, he says, is well positioned to benefit regardless of the environment. “K stands out as one of the few who will be able to sustain increasingly scarce growth given its favorable end-market exposure and strong business momentum,” English said. “Yet it is valued among the prospective laggards.” English also noted that Kellogg is woefully undervalued compared with the growth opportunity the stock presents investors, despite concerns over the company’s planned split. “We upgrade K to Buy, as we see a stock mispriced for the growth potential it offers investors; we see opportunity to exploit the dislocation we believe this exacerbated concern has created and recommend investors buy this secularly advantaged growth stock on sale,” he said. Kellogg stock has slumped nearly 8% from the start of the year. K YTD mountain Kellogg stock has pulled back more than 7% in 2023. — CNBC’s Michael Bloom contributed to this report.
