NEW YORK (AP) -- An analyst lowered General Mills' rating on Friday, saying he was concerned that the company's "restrained" advertising and marketing spending will hurt demand for its products.
General Mills' brands include Cheerios, Betty Crocker and Yoplait.
In a note to clients, Jefferies' Thilo Wrede said that he's worried that too much of a reduction to advertising and media spending — as a percentage of sales — will hurt General Mills' business in the long term.
Data from other food companies supports his theory that cutting back on advertising and marketing hurts sales volumes, Wrede said.
General Mills has said that it expects its media spending to rise by a low-single-digit percentage in the 2014 fiscal year ending next May. It spent $895 million in fiscal 2013. It is the company's practice not to comment on analyst reports.
Wrede cut his rating on General Mills Inc.'s stock to "Underperform" from "Hold" and trimmed his price target by $1, to $44.
The Minneapolis company's stock declined $1.20, or 2.4 percent, to $49.35. Shares have risen 25 percent this year.