General Mills, Inc.

GIS Details

General Mills, Inc. (NYSE: GIS) is the leading global packaged food company, which is engaged in producing snacks, cereal, convenient meals, yogurt, dough, baking mixes and ingredients, pet food, and super-premium ice cream.

Financial Results

• GIS has reported Q3 FY 2024 results and its net sales stood at $5.1 Bn, which were down 1% in the third quarter. Its organic net sales were also down 1%. On the 2-year compound growth basis, the company’s net sales rose 6% as well as organic net sales increased 7%.
• Operating profit of the company was $911 Mn which was up 25% and its adjusted operating profit stood at $914 Mn, reflecting an increase of 14% in constant currency

Outlook

The company is expecting that the largest factors impacting its performance in fiscal 2024 would be the economic health of consumers, the moderating rate of input cost inflation as well as increasing stability of the supply chain environment. In full-year fiscal 2024, its organic net sales are expected to range between down 1% and flat.

Key Risks

The company’s predictions regarding future net sales as well as earnings might be impacted by variety of factors such as disruptions or inefficiencies in supply chain, competitive dynamics, etc.

Fundamental Valuation

Price/EPS Based Relative Valuation

Stock Recommendation

Over the last three months, the stock has increased by ~11.4%. The stock has made a 52-week low and high of USD 60.33 and USD 90.89, respectively. The company’s performance is exposed to the risks related to the global slowdown as well as geopolitical tensions.

Also, uncertain economic conditions, which includes changes in inflation rates, interest rates, tax rates, or availability of capital are some of the additional risks. Apart from these, the consumer reaction to pricing actions and changes in the legal and regulatory environment could also impact its business performance.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD 70.42 per share, up by 1.93% as on 19^th April 2024

Technical Overview:

GIS Daily Technical Chart, Data Source: REFINITIV

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for share price chart and stock valuation is based on April 19, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Disclaimer

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