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Investing.com - RBC Capital upgraded General Mills (NYSE:GIS) from Sector Perform to Outperform on Thursday, while lowering its price target to $63.00 from $67.00. The stock, currently trading at $50.68, sits near its 52-week low of $50.66 and trades at an attractive P/E ratio of 11.2x.
The food company’s stock rating was raised based on RBC’s belief that General Mills’ fiscal year 2026 earnings per share guidance includes sufficient cushion to deliver results despite the ongoing sluggish market environment. The company has demonstrated strong shareholder returns, maintaining dividend payments for 55 consecutive years with a current yield of 4.7%.
RBC Capital highlighted management’s acknowledgment that prices need to come down further, especially in the North American Retail segment, as an encouraging sign for the company’s strategy.
The revised $63 price target represents approximately 25% upside potential from current trading levels, according to RBC Capital’s analysis.
The upgrade aligns with RBC’s investment framework for the remainder of 2025, which focuses on identifying companies that have cut earnings expectations sufficiently, with analysts noting that General Mills "now falls within this bucket."
In other recent news, General Mills reported its fiscal fourth-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.74, which surpassed the forecast of $0.71. Revenue stood at $4.6 billion, aligning with expectations. Despite this earnings beat, investor concerns over strategic reinvestments led to a pre-market stock decline. The company plans significant investments in its Fresh Pet food line, aiming to grow this segment substantially over the next decade. In a separate development, Jefferies lowered its price target for General Mills from $53 to $51, maintaining a Hold rating. The firm noted the company’s fiscal 2026 guidance reflects efforts to enhance demand and competitiveness through price reductions and increased media spending. General Mills’ approach includes innovation and productivity-driven price adjustments to return to volume-led growth. Analysts from Jefferies highlighted that consumer response to these strategies remains uncertain.
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