Kellogg downgraded at Barclays As previously reported, Barclays downgraded Kellogg to Underweight from Equal Weight. The analyst believes Kellogg's investment in the announced Project K initiative, the sluggish cereal environment, and the challenging U.S. snacks market will limit share upside.
Kellogg says US cereal business has momentum in 2016 Expects improved gross margin in 2016, excluding Venezuela. Sees FY16 interest expense $235M-$245M. Sees FY16 effective tax rate of 27%-28%. Still expects to repurchase $700M-$750M in 2016 as a part of the $1.5B share repurchase program that will run through 2017. Currency translation could have impact of as much as 10c per share in 2016. Said FX headwinds hurt Q4 EPS by 6c. The currency headwind will be much more impactful in Q1 and 1H16. Expects integration costs from Egypt and Nigeria will be between 2c-3c for FY16. Sees incremental savings for Project K to be $100M in FY16. Comments taken from Q4 earnings conference call.