Analysts maintain a neutral view
The majority of analysts continue to keep a neutral view on General Mills’ (GIS) stock. The company’s top line is likely to disappoint, as improvement in snacks, cereals, and frozen meals are expected to be offset by declines in yogurt sales. Plus, margin pressure from input cost inflation and higher transportation expenses remain a drag. However, the company’s focus on cost savings, price restructuring, and higher sales from new product launches are expected to support the company’s financials.
The company recently announced the acquisition of Blue Buffalo Pet Products, which is expected to be accretive to its sales and operating profit margins. However, many believe the company paid a steep price for the acquisition, leading to a debt-to-EBITDA ratio of 4.2x, which seems a bit high.
Target price and rating summary
Of the 20 analysts providing recommendations on General Mills’ stock, 75.0% suggest a “hold,” 15.0% recommend a “buy,” and 10.0% maintain a “sell” rating. Meanwhile, analysts recommend a price target of $57.72 per share on GIS stock, which reflects an upside potential of 11.1% to its closing price of $51.97 on March 12.
In comparison, analysts also maintain a neutral view on Kellogg (K), Hershey (HSY), Campbell Soup (CPB), and J. M. Smucker (SJM). Meanwhile, they maintain a positive outlook on Conagra Brands (CAG), Mondelēz (MDLZ), and Kraft Heinz (KHC) stock.