RBC views Utz as potential target following Kellanova buyout

RBC Capital believes the Kellanova (K) takeover makes sense for Mars’ strategy in snacking. While the multiple paid was toward the lower end of the comp range, sector valuations are 1.5 times below historical levels, the analyst tells investors in a research note. The firm continues to believe there are positive implications for Utz Brands (UTZ) as a potential acquisition target from the Kellanova deal. Further, Mars may not need to take price increases in chocolate as growth and synergies should help offset cocoa inflation, adds RBC. It sees limited regulatory risk from the deal closing and keeps an Outperform rating on Kellanova. Shares of Utz are up 3% to $16.87 in morning trading while Kellanova is up 8% to $80.19.