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Investing.com - Stifel lowered its price target on General Mills (NYSE:GIS) to $56.00 from $65.00 on Thursday, while maintaining a Buy rating on the stock. The new target comes as shares trade near their 52-week low of $50.66, with technical indicators from InvestingPro suggesting the stock is in oversold territory.
The food company reported its fourth-quarter results with organic sales declining 3% and earnings per share of $0.74, representing a 27% decline on a constant currency basis. The EPS figure exceeded Stifel’s estimate by $0.05, primarily due to favorable inventory timing in the North America Pet business. Despite recent challenges, the company maintains an impressive track record of 55 consecutive years of dividend payments, currently offering a 4.74% yield.
General Mills provided initial guidance for fiscal year 2026, projecting an earnings per share decline between 15% and 10%. The outlook includes a heavier burden from reinvestment than Stifel had anticipated.
Stifel noted that while the softer profit outlook is disappointing, the firm believes the increased investment spending is necessary to improve General Mills’ volume performance and ultimately enhance the company’s ability to sustainably grow both organic sales and profit.
The research firm remains constructive on General Mills shares, pointing out that the company’s categories are modestly growing and volume share performance is improving in key categories where investments have taken hold.
In other recent news, General Mills reported a modest earnings per share upside in its fourth quarter, driven by favorable corporate expenses and market share improvements in North American Retail. However, the company’s fiscal year 2026 guidance reflects weaker operating income expectations due to reinvestment efforts across its North American portfolio. Barclays (LON:BARC) lowered its price target for General Mills to $54, maintaining an Equalweight rating, as the company plans a national launch of fresh pet food under its Blue Buffalo brand, supported by multi-year investments. BofA Securities also reduced its price target to $61, citing execution concerns, though it maintained a Buy rating based on General Mills’ historical execution and strong pet segment portfolio.
RBC Capital upgraded General Mills’ stock rating from Sector Perform to Outperform, lowering the price target to $63, believing the company’s fiscal year 2026 earnings guidance has enough cushion to meet targets despite market challenges. Jefferies adjusted its price target to $51, maintaining a Hold rating, and noted that General Mills is actively reducing prices and increasing innovation to address consumer budget constraints and drive volume-led growth. These developments highlight ongoing strategic adjustments by General Mills as it navigates a competitive market landscape.
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