uploads/2018/09/GIS-ANR-1.png

What Analysts Recommend for GIS Stock

By

Updated

Analysts maintain a “hold”

Analysts maintained a neutral outlook on General Mills (GIS) stock before its earnings for the fiscal first quarter of 2019. Incremental sales from the Blue Buffalo acquisition, higher net price realization, cost and productivity savings, and lower taxes are expected to drive the company’s financials.

General Mills’ earnings in fiscal 2019 are expected to be dented by continued weakness in its base business, soft volumes, inflation in input and logistics, inflation, higher interest expenses, and an increased outstanding share count.

Article continues below advertisement

Among the 19 analysts tracking General Mills (GIS) stock, 14 analysts maintained a “hold,” four analysts gave a “buy” rating, and one analyst suggested a “sell.” These analysts have a consensus target price of $48.29 per share on GIS stock, which indicates a 3.3% upside based on its closing price of $46.75 on September 11.

General Mills stock is trading at a forward PE (price-to-earnings) multiple of 15.4x, which is well below its four-year historical average multiple of 18.3x. Low growth expectations and weak consumer demand for packaged foods subdued the attractiveness of GIS stock.

Analysts’ recommendations for peers

Analysts maintained a neutral outlook on the majority of packaged food stocks, including Kellogg (K), Hershey (HSY), Campbell Soup (CPB), and J.M. Smucker (SJM). Weak demand for packaged foods, cost headwinds, and a tough retail environment are expected to restrict the upside for these stocks.

However, analysts maintained “buy” ratings on Conagra Brands (CAG), Mondelēz (MDLZ), and Kraft Heinz (KHC).

Advertisement

More From Market Realist