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Investing.com - Stifel has reiterated its Buy rating and $56.00 price target on General Mills (NYSE:GIS) following a fireside discussion with the company’s leadership. The stock, currently trading near its 52-week low of $49.86, shows a modest undervaluation according to InvestingPro analysis, with shares trading at an attractive P/E ratio of 12.5x.
The investment firm held discussions with General Mills Chairman and CEO Jeff Harmening and Investor Relations representative Jeff Siemon after the company’s recent fourth-quarter fiscal 2025 earnings report, which included the initial fiscal year 2026 outlook. The company maintains a strong dividend track record, having paid dividends for 55 consecutive years, with a current yield of 4.73%. InvestingPro data reveals management has been actively buying back shares, though 11 analysts have recently revised their earnings expectations downward.
Stifel expressed encouragement regarding progress in General Mills’ investments to improve volumes, noting sequential improvement at the start of the first quarter of fiscal 2026.
The firm also gained better understanding of the drivers behind the unique earnings phasing throughout fiscal year 2026, while noting that General Mills remains "tight lipped" about plans for its upcoming fresh dog food launch.
Stifel maintained its fiscal year 2026 earnings per share estimates for General Mills, with only slight adjustments to the phasing of earnings throughout the year.
In other recent news, General Mills has completed the sale of its U.S. yogurt business to Lactalis, including brands like Yoplait and Go-Gurt, which contributed approximately $1.2 billion to the company’s fiscal 2025 net sales. Following this transaction, General Mills reported total fiscal 2025 net sales of $19 billion, along with an additional $1 billion from non-consolidated joint venture net sales. The company plans to use the proceeds from the sale for share repurchases and debt reduction. Meanwhile, several analysts have adjusted their price targets for General Mills due to various challenges. UBS lowered its price target to $49, maintaining a Sell rating, citing a weaker-than-expected fiscal 2026 earnings outlook. Bernstein reduced its target to $55, attributing the change to ongoing category headwinds and the impact of weight loss medications on consumer behavior. Evercore ISI adjusted its target to $54, reflecting a revised discounted cash flow analysis, while Stifel decreased its target to $56, maintaining a Buy rating despite the company’s softer profit outlook. Stifel emphasized the importance of increased investment spending to improve volume performance and sustain growth.
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