How are energy investors positioned?
On Monday, General Mills (NYSE:GIS) saw its price target increased by Jefferies from $58.00 to $62.00, while the firm maintained a Hold rating on the shares. The adjustment follows observations made by General Mills management during the Consumer Analyst Group of New York (CAGNY) conference, where they discussed current trends in retailer inventory and consumption that might suggest a potential guidance revision during their third-quarter earnings report, scheduled for March 19. According to InvestingPro data, 9 analysts have recently revised their earnings expectations downward for the upcoming period, while the stock currently trades at $66.77.
Jefferies’ analysis supports the possibility of a guidance cut, noting that fiscal third-quarter retail sales trends for General Mills have shown a sequential decline from the second quarter. This downturn has been primarily attributed to ready-to-eat cereal and snack bars. Additionally, the third quarter is expected to be impacted negatively by a timing shift related to Thanksgiving. InvestingPro analysis indicates the company’s revenue declined by 1.48% in the last twelve months, though it maintains strong profitability with a 35.27% gross margin.
The firm also pointed out that while General Mills has deepened price investments, there has not been a corresponding improvement in volume, indicating that further investment might be necessary. Despite the price target increase, Jefferies reiterated their Hold rating on General Mills stock, suggesting that they do not see significant potential for stock performance improvement in the near term.
The comments from Jefferies highlight the challenges faced by General Mills in a competitive market where consumer trends and holiday timing can significantly affect sales performance. As the market anticipates General Mills’ third-quarter earnings report, investors will be looking to see how these factors have influenced the company’s financials and whether management’s strategies will adjust to address these issues.
In other recent news, General Mills has reported a series of developments affecting its operations and financial outlook. The company announced a leadership change within its North America Pet segment, with Liz Mascolo set to take over as Segment President in March 2025. General Mills has also finalized the sale of its Canadian yogurt operations to Sodiaal, including the Yoplait and Liberté brands, as part of its strategic divestiture plan. This move is accompanied by a revised fiscal 2025 outlook, projecting a decrease in adjusted diluted earnings per share between 4 percent and 2 percent in constant currency.
Piper Sandler has downgraded its price target for General Mills from $84 to $71 while maintaining an Overweight rating, citing concerns about slower sales growth and inventory reductions. Meanwhile, Stifel has adjusted its price target to $78 from $82, maintaining a Buy rating after General Mills reported a 12% rise in earnings per share for the second quarter of fiscal year 2025, surpassing consensus estimates. The company’s earnings report prompted Stifel to revise its full-year EPS forecast to $4.44, reflecting a 2% decline.
Additionally, board member C. Kim Goodwin has decided not to seek reelection at the upcoming Annual Meeting of Shareholders, as disclosed in a regulatory filing. These changes come as General Mills continues to navigate challenges in its North American Retail and Pet segments, with analysts noting potential risks from regulatory uncertainties. Despite these challenges, General Mills remains committed to its strategic objectives, focusing on brand building, innovation, and maintaining market share advancements.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.