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General Mills Stock: Analysts’ Recommendations before Q4

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Analysts remain on the sidelines

Most of the analysts remain on sidelines about General Mills (GIS) stock before its fourth-quarter results. General Mills had impressive organic sales growth during the last reported quarter. The company’s bottom line beat analysts’ estimate in the past five quarters, which drove its stock higher. However, General Mills’ shares have increased 36.1% in 2019, which reflects the positives.

Analysts expect General Mills’ revenue growth to decelerate in fiscal 2020 as it annualizes the Blue Buffalo acquisition and faces tough comparisons. The company’s adjusted EPS is expected to stabilize in fiscal 2020. However, General Mills’ EPS growth could stay low.

Citing a slowdown in the sales growth rate, Goldman Sachs downgraded General Mills stock from “neutral” to “sell” on May 29.

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Ratings and target price

Among the 18 analysts providing ratings on General Mills stock, 12 recommended a “hold,” four recommended a “buy,” and two recommended a “sell.” Analysts’ consensus target price of $51.38 per share indicates a downside of 3.0% in General Mills stock based on its closing price of $52.98 on June 17.

Packaged food companies’ top-line growth is expected to soften a bit as they annualize their recent acquisitions and face tough comps. Challenges in the base business and cost headwinds are keeping analysts on the sidelines.

Besides General Mills stock, analysts recommended a “hold” rating on J.M. Smucker (SJM), Hershey (HSY), and Kellogg (K) stock. Most of the analysts recommended a “sell” on Campbell Soup (CPB).

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