General Mills (GIS) shares have generated better returns than the benchmark index. So far, the shares have risen 35.4% in 2019. The company’s impressive sales and margin expansion supported the upside in its stock. The better-than-expected bottom-line performance in the past several quarters and improved EPS guidance also drove General Mills stock higher.
Other major packaged food companies have also marked stellar gains due to an acceleration in the sales growth rate, a sequential improvement in the base business, and improved margins.
General Mills’ strong financial performance during the last reported quarter and upbeat EPS outlook are expected to support its stock. Higher pricing and a favorable mix will likely drive the company’s organic sales and margins.
However, the company faces a tough YoY (year-over-year) comparison in fiscal 2020. General Mills’ sales growth is projected to decelerate as it annualizes its Blue Buffalo acquisition. Weakness in organic volumes is also a drag.
General Mills’ bottom line is projected to stabilize in fiscal 2020. However, the growth rate will likely be low and could restrict the upside in the stock.