Analysts have a neutral outlook
Most analysts covering General Mills (GIS) stock remain on the sidelines, as shares of General Mills are up ~31% on a year-to-date basis, which indicates that the positives have been priced in. Meanwhile, General Mills has annualized the acquisition of Blue Buffalo, which is likely to result in a deceleration in its sales growth rate in the coming quarters.
Analysts expect General Mills’ top line growth rate to remain low in fiscal 2020 as the company faces tough year-over-year comps. Also, weakness in organic volumes could further limit its sales growth rate.
General Mills’ EPS are expected to stabilize in fiscal 2020. However, its adjusted earnings are expected to mark mid-single-digit growth.
General Mills stock is trading at 15.5x its fiscal 2020 estimated EPS of $3.30, which looks unattractive given the anticipated mid-single-digit growth in its EPS in the period.
Rating and target price summary
Among the 18 analysts covering the stock, 12 have given it “holds,” five have given it “buys,” and one has given it a “sell.” Wall Street analysts have a consensus target price of $49.73 per share on General Mills, which implies a downside of 2.7% based on its closing price of $51.09 on March 25.
Analysts also maintain “hold” ratings on the J.M. Smucker Company (SJM) and the Kellogg Company (K) stocks. Meanwhile, analysts have given Conagra Brands (CAG) stock a consensus “buy” recommendation. Wall Street has “sell” recommendations on the Campbell Soup Company (CPB) stock.