K – Market expectations are for record-high Uniform ROA, but management has concerns about guidance, growth, international markets and investments

• Kellogg Company (K:USA) is currently trading near historical lows relative to UAFRS-based (Uniform) Earnings, with an 18.3x Uniform P/E. However, even at these levels, the market has bullish expectations for the firm, while management has concerns about guidance, growth, international markets and investments
• Specifically, management may be downplaying their concerns about pessimism in the food space and may have concerns about meeting full year guidance. Moreover, they may be overstating the progress they have made towards stabilizing market share in the Australia, Canada, and U.K. markets. Furthermore, they appear to be overstating their optimism surrounding investments in promotions and in-store support, with regard to their ability to drive consumption improvements