UPDATE: Kellogg (K): Accounting Shenanigans Beginning To Raise Questions - Bernstein

(Updated - June 27, 2017 3:08 PM EDT)

Bernstein analyst, Alexia Howard, reiterated her Underperform rating on shares of Kellogg (NYSE: K) noting accounting concerns that could begin to raise flags with large investors.

The analyst noted that in 1Q:16, Kellogg began to significantly extend payment terms to some of its customers. In recent weeks a number of investors have begun to raise questions about what this might mean and why Kellogg alone seems to have pursued such a financial strategy to this extent.

This move did not impact the balance sheet or cash flow statement because the company offset the cash drain of these extensions by selling proportional amounts of accounts receivable.

The analyst stated she "wonder(s) what (if any) will be the implications for Kellogg's top line once it stops extending incremental terms".

No change to the price target of $62.

(Updated with minor changes to wording in first paragraph)

For an analyst ratings summary and ratings history on Kellogg click here. For more ratings news on Kellogg click here.

Shares of Kellogg closed at $70.99 yesterday.

You May Also Be Interested In

• Bernstein SocGen Group Upgrades Whitbread PLC. (WTB:LN) (WTBCF) to Market Perform
• Amylyx Pharmaceuticals inc. (AMLX) PT Raised to $42 at Mizuho
• Marvell (MRVL) PT Raised to $225 at TD Cowen