It's been two weeks since Kellogg split into two companies: WK Kellogg (KLG -3.34%) and Kellanova. But WK Kellogg stock still isn't getting any love from Wall Street. Today, another analyst gave a tepid outlook for the stock, failing once again to excite investors. And that's why WK Kellogg stock was down about 10% as of 1:30 p.m. ET.
Wall Street is downbeat about WK Kellogg
Bank of America analyst Peter Galbo is the latest to weigh in on WK Kellogg stock. According to TipRanks, Galbo started his coverage of the company with a neutral rating and a price target of $11.50 per share. Considering this is well below the price of $13.80 per share that it started at just two weeks ago, Galbo's price target isn't very inspiring.
Of the analysts tracked by TipRanks, five have weighed on WK Kellogg stock so far. None have recommended buying shares and one recommends selling. The rest are neutral. This perhaps explains why shares have largely trended downward since the company separated from Kellanova.
Is WK Kellogg stock cheap now?
To be fair, WK Kellogg stock is hard to assess as an investment right now. Based on the details of the transaction, the company's market capitalization is around $830 million, which certainly looks cheap. Consider that WK Kellogg only has the North America breakfast cereal business while Kellanova got the rest of what formerly belonged to Kellogg. But even still, management estimates this to be a $2.7 billion business, which means the stock trades at a paltry 0.3 times sales.
However, WK Kellogg's business likely appeals to dividend investors more than growth or value investors. And dividend investors are likely still on the sidelines because it's unclear how much the company will be paying in quarterly dividends -- management has said its dividend will be "attractive."
This could be a chance for steady dividend income at an attractive valuation. But investors simply don't have all the details yet to be sure.
