Analysts Lowered General Mills’ Target Price after 1Q18
Recent analysts’ activity
After General Mills reported sluggish fiscal 1Q18 results, several analysts lowered their target prices for the stock. Barclays reduced its target price on GIS stock to $55 from $59. Morgan Stanley cut the target price to $52 from $55. Both firms maintained their “equal weight” recommendation for GIS stock. Susquehanna lowered its target price to $56 from $58 and maintained a “neutral” outlook. RBC reduced its price target from $62 to $58.
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General Mills is likely to disappoint on sales in the coming quarters. Despite management’s efforts to lift sales, sluggish demand in North America, shrinking shelf space, and increased competition are expected to remain a drag and restrict its top line growth. Lower volumes, higher input costs, and the planned increase in promotions for the second half of the year are projected to pressure margins and, in turn, EPS (earnings per share).
The majority of analysts providing ratings on GIS stock have maintained a “neutral” outlook. Analysts have a consensus score of 3.2 on GIS stock, where 1.0 implies a “strong buy,” and 5.0 denotes a “strong sell.” About 65.0% of the 20 analysts covering the stock maintain a “hold,” 10.0% recommend a “buy,” and 25.0% rate it a “sell.”
As of September 20, 2017, GIS stock closed 5.1% below analysts’ 12-month price target of $54.83 per share.
In comparison, the majority of analysts maintain a “neutral” outlook on most of the food stocks, including Kellogg (K), J.M. Smucker (SJM), Hershey (HSY), and Campbell Soup (CPB). Analysts have maintained a “positive” outlook on Conagra Brands (CAG), Tyson Foods (TSN), and Kraft Heinz (KHC) stock in the food space.