Stryker shares tumble despite strong Q2 results and raised guidance
Investing.com - BofA Securities lowered its price target on General Mills (NYSE:GIS) stock to $61 from $63 while maintaining a Buy rating on Wednesday. According to InvestingPro data, the stock is currently trading at $50.68, suggesting potential upside to BofA’s target despite trading near its 52-week low of $50.66.
General Mills shares fell 5% following the company’s earnings results, a reaction BofA described as "more negative than we expected." The food manufacturer’s initial fiscal year 2026 outlook aligned with BofA’s expectations and had been consistently messaged since the Consumer Analyst Group of New York (CAGNY) conference in February. InvestingPro analysis indicates the stock is currently in oversold territory, with a P/E ratio of 11.17x and an attractive 4.74% dividend yield.
Critics argue that General Mills’ FY26 outlook is heavily weighted toward the fourth quarter, potentially raising execution risk. Bears also contend the stock faces valuation multiple downside compared to center-store peers trading closer to 10x price-to-earnings ratios.
BofA defended its Buy rating, stating that General Mills’ "superior historical execution and better relative portfolio (Pet)" should warrant some premium multiple compared to peers. The firm acknowledged that future stock price appreciation will depend on execution against what it views as "an achievable FY26 plan."
The price target reduction comes as investors assess General Mills’ ability to deliver on its financial projections amid ongoing challenges in the packaged food sector.
In other recent news, General Mills reported its fiscal fourth-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.74, surpassing the forecast of $0.71. Revenue met expectations at $4.6 billion. The company is focusing on strategic investments and volume growth, particularly in North America Retail, despite a price mix decline in this segment. RBC Capital upgraded General Mills’ stock rating from Sector Perform to Outperform, citing achievable fiscal year 2026 earnings guidance and a revised price target of $63.00. Jefferies, however, lowered its price target to $51.00 while maintaining a Hold rating, acknowledging the company’s efforts to improve demand and competitiveness. General Mills is taking steps to reduce prices in response to consumer budget constraints and aims to return to volume-led growth. The company plans significant investments in its Fresh Pet food line, anticipating it to grow substantially over the next decade. These developments reflect General Mills’ ongoing strategies to navigate market challenges and position itself for future growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.