Kellogg Stock Has Underperformed The Market Since 2018- Here’s Why

K: Kellogg logo

Kellogg (NYSE: K) stock price gained 32% from $57 at 2018 end to around $75 currently, primarily due to favorable changes in its P/S multiple. Additionally, the company witnessed a small rise in its revenue per share, driven by a rise in sales and a drop in its outstanding share count. However, despite the stock’s gains, Kellogg has largely underperformed the S&P, which returned almost 65% over the same period.

In our interactive dashboard, Why Kellogg Stock Moved: K Stock Has Gained 32% Since 2018, we break down the factors behind this move.

(A) Kellogg’s Total Revenue has risen 5.3% from $13.5 billion in FY 2018 to $14.3 billion currently

  • Kellogg’s total revenue has risen steadily from $13.5 billion in FY ’18 to $14.2 billion in FY ’21, and currently stands at $14.3 billion on an LTM basis.
  • In FY ’21, around 58% of Kellogg’s sales came from the North America region, bringing in $8.17 billion for the company.
  • However, sales from North America have in fact dropped $200 million over the last two years, and Europe and AMEA (Africa Middle East Asia) have seen sales grow at a faster rate, adding a combined $750 million since FY 2019.
  • For details about Kellogg revenues and comparison to peers, see Kellogg (K) Revenue Comparison
Relevant Articles
  1. Here’s A Better Pick Over Lockheed Martin Stock
  2. What’s Driving Vertex Pharmaceuticals Stock Higher?
  3. This CGM Device Maker Is Likely To Outperform Abbott Stock
  4. What To Expect From Nike’s Stock Post Q1?
  5. Is Cleveland-Cliffs Stock A Buy Despite Tough Macros?
  6. eBay Stock Lost 8% In One Week, What’s Next?

(B) Revenue per share (RPS) increased 8% from $38.81 in FY 2018 to $41.93 currently

  • Kellogg revenue rose from $13.5 billion in 2018 to $14.3 billion currently, while the outstanding share count dropped from 349.1 million in 2018 to 340.3 million currently.
  • Due to this, RPS has risen steadily from $38.81 in FY ’18 to $41.93 currently.

(C) Price-To-Sales (P/S) multiple for Kellogg rose from 1.4x in 2018 to 1.7x by 2019 end, but then pulled back to 1.5x in 2020 and 2021, before rising to 1.8x currently

  • Kellogg’s P/S multiple rose to around 1.7x by late 2019, on the back of rising investor expectations surrounding continued demand growth for its products across all regions, leading to a rise in the company’s sales.
  • However, due to the increased economic uncertainty weighing on the broader markets and the gradual drop in North America sales, the P/S multiple had pulled back to 1.5x by 2021 end, before rising to as high as 1.8x currently.
  • For additional details about the company’s sales and comparison to peers, see Kellogg (K) Revenue Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Aug 2022
MTD [1]
YTD [1]
Total [2]
 K Return 2% 17% 2%
 S&P 500 Return 0% -14% 84%
 Trefis Multi-Strategy Portfolio 1% -13% 245%

[1] Month-to-date and year-to-date as of 8/9/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates