Throughout the last year, Kellanova (K) traded at between $50 - $60. The uptrend ended in a break out to around $75.00. On August 5, 2024, TD Cowen’s analyst speculated that Mars would benefit from acquiring the firm.
Mars and Kellanova are highly complementary. It would help Mars increase its scale in international markets. Additionally, the packaged food segment may realize savings by merging the businesses.
Hershey (HSY), which owns Mars, would need to outbid Mondelez (MDLZ) and PepsiCo (PEP). Most importantly, an HSY/K combination would not trigger any antitrust concerns.
The main issue of the rumored buyout is Hershey’s size. It has a market capitalization of around $41 billion. Kellanova’s market cap is $25.63 billion. Its size would need to drop to $20 billion before Hershey bid for the firm.
Kenvue (KVUE) broke out of its $18 - $18.50 trading range in the last week. In the second quarter, it posted revenue of $4 billion (down by 0.3% Y/Y). However, it reaffirmed its outlook for the fiscal year. Net sales will grow by between 1% to 3%.
Kenvue raised its dividend by 2.5% to $0.205 a share. The yield will rise above 4% as profit growth continues. The firm increased its productivity in the last two quarters. Consumers continue to buy its most iconic brands.
