WK Kellogg initiated with a Neutral at JPMorgan

JPMorgan analyst Ken Goldman initiated coverage of WK Kellogg with a Neutral rating and $11 price target. The analyst sees the potential for gross margin expansion over time, lowered by supply chain investments. However, the firm is not sure if this will translate into quite the level of EBITDA growth that WK Kellogg expects. The cereal category has experienced demand erosion over time, and management’s outlook for 0% revenue growth the next few years does not look conservative, the analyst tells investors in a research note.