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Investing.com - RBC Capital maintained its Sector Perform rating and $67.00 price target on General Mills (NYSE:GIS) stock Monday, noting the company’s turnaround efforts remain a work in progress. The stock, currently trading near its 52-week low at $53.36, offers a compelling 4.53% dividend yield, supported by 55 consecutive years of dividend payments.
The research firm indicated expectations are low heading into General Mills’ fourth-quarter earnings report, due in just two days, as the company works to return to growth amid what it described as a "soft packaged food environment." With revenue declining 2.62% over the last twelve months, RBC believes consensus expectations for the fiscal fourth quarter are "in a reasonable place."
Looking ahead to fiscal 2026, RBC emphasized it will be "critical" for General Mills to demonstrate that its Remarkable Experience Framework can drive the business to positive sales growth for at least part of the year. The firm projects fiscal 2026 organic sales to be approximately flat.
RBC noted that both top and bottom lines will be affected by General Mills’ recent acquisitions and divestitures, factors that will influence the company’s financial performance in the coming fiscal year.
The firm’s maintained Sector Perform rating comes as General Mills continues to navigate challenging conditions in the packaged food sector while implementing its strategic framework aimed at returning the business to growth.
In other recent news, General Mills announced fiscal 2024 net sales of $20 billion, along with $1 billion from non-consolidated joint ventures. The company is expanding its pet food portfolio by launching Blue Buffalo’s "Love Made Fresh" line and introducing the European brand Edgard & Cooper to the U.S. market. Analysts have adjusted their outlooks on General Mills, with TD Cowen reducing its price target from $52 to $50, citing cost inflation and a projected earnings per share of $3.70 for fiscal year 2026. BofA Securities also lowered its price target to $63 due to the impact of the upcoming divestiture of the U.S. yogurt business, which is expected to affect earnings by $0.18 per share. Goldman Sachs downgraded the stock from Buy to Neutral and reduced its price target to $58, pointing to limited upside potential in the near term. In efforts to streamline operations, General Mills announced a $130 million cost-reduction plan, expected to be largely completed by the end of fiscal 2028. The initiative focuses on enhancing business processes and aims for significant long-term cost savings.
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