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Investing.com - RBC Capital has reiterated its Outperform rating and $63.00 price target on General Mills (NYSE:GIS) despite ongoing challenges for the food manufacturer. The stock, currently trading near its 52-week low of $48.29, offers a compelling 4.89% dividend yield and trades at a P/E ratio of 12.22. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value model.
The firm expects a "neutral quarter" for General Mills to start its fiscal year, with year-over-year consumption trends showing sequential improvement even as the stock continues to face downward pressure.
RBC notes that investor sentiment around packaged food remains poor, and fundamentals for General Mills have yet to fully turn around, contributing to the stock’s recent performance.
For the first quarter of fiscal 2026, RBC’s estimates fall slightly below consensus, citing several factors including likely reversal of pet shipments from the fourth quarter of fiscal 2025, headwinds from wheat prices, negative impact from trade expense timing, and sequentially tougher comparisons.
Despite these challenges, RBC does not expect General Mills to adjust its guidance, as the operating environment has remained largely stable since the company’s last earnings report.
In other recent news, General Mills announced a significant $54 million investment to expand its James Ford Bell Technical Center in Golden Valley, Minnesota. This expansion will add a new 35,000-square-foot pilot plant wing, enhancing the company’s innovation and development capabilities. Meanwhile, Morgan Stanley has adjusted its price target for General Mills to $48.00, maintaining an Underweight rating, while anticipating relatively stable first-quarter results. UBS continues to hold a Sell rating with a $49.00 price target, expressing concerns about the company’s valuation compared to similar firms. Jefferies also lowered its price target to $50.00, noting slight improvements in retail sales and volumes over a recent 12-week period.
Piper Sandler, however, remains optimistic, reiterating an Overweight rating and a $60.00 price target, citing General Mills’ focus on innovation as a pivotal growth strategy. The company has reaffirmed its fiscal year 2026 guidance, indicating a continued commitment to its long-term plans. These developments reflect a mixed outlook from analysts, with varying perspectives on General Mills’ valuation and growth potential.
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