Goldman Sachs has revised its stance on General Mills (GIS, Financial) from a Buy to a Neutral rating, also lowering the price target from $68 to $58. According to the firm, companies specializing in center-of-store food products are encountering several challenges. These include rising cost pressures and lackluster volume demand as consumers increasingly prefer fresh options, along with growing competition from private and smaller brands.
The analyst cautions that it may take several quarters for these companies to execute consistently and regain investor trust, as these pressures are expected to persist in the near term. Consequently, Goldman Sachs anticipates limited potential for upward estimate revisions for related companies shortly. Additionally, General Mills is experiencing slowed sales trends and reduced volumes across key sectors, adding to the firm's concerns.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for General Mills Inc (GIS, Financial) is $61.61 with a high estimate of $72.11 and a low estimate of $52.00. The average target implies an upside of 12.48% from the current price of $54.77. More detailed estimate data can be found on the General Mills Inc (GIS) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, General Mills Inc's (GIS, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for General Mills Inc (GIS, Financial) in one year is $71.37, suggesting a upside of 30.31% from the current price of $54.77. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the General Mills Inc (GIS) Summary page.
GIS Key Business Developments
Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- General Mills Inc (GIS, Financial) is focusing on accelerating organic growth with a sharp focus on value and innovation.
- The company plans to reinvest savings from HMM and an additional $100 million in cost savings to drive growth.
- General Mills Inc (GIS) is stepping up its marketing efforts, particularly for major brands like Blue Buffalo, Pillsbury, and Cereal.
- The company is optimistic about its innovation pipeline, with plans for fewer but bigger product launches in fiscal '26.
- General Mills Inc (GIS) has completed a comprehensive evaluation of its brand portfolio to ensure competitiveness across categories.
Negative Points
- Consumer confidence remains low, impacting the demand for value-oriented products.
- The company faces headwinds from Yoplait dilution and tariffs, which could affect profitability.
- General Mills Inc (GIS) is experiencing challenges in the snacks category, with a need to address value and innovation.
- The company is dealing with inventory headwinds in its pet segment, particularly in dry pet food.
- There is a need for improved marketing and innovation support to regain competitiveness in certain categories like fruit snacks and bars.
