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Shares of Rice Krispies and Special K maker WK Kellogg ( KLG ) slipped Wednesday after Bank of America Securities put a bearish rating on the cereal company’s shares.
Kellogg’s stock was recently down 2.5% to $15.72 after the bank’s analysts cut their rating on the stock to “underperform” from “neutral” and their price target to $17 from $24.
The analysts cited “sluggish” industry trends, noting falling quarterly sales and soft guidance from competitor General Mills ( GIS ). That could lead to more advertising and product promotions, straining margins, they said.
Future Margin Growth Questioned
Kellogg’s “value creation story lies in meaningful 2026 margin expansion which now seems less assured,” the analysts wrote.
The company in May reaffirmed its 2024 guidance , pointing investors toward adjusted net sales coming in for the full year in a range of a 1% decline to 1% growth.
Shares of General Mills were up 1% late Wednesday.