What Do Investors Need To Know About General Mills Inc’s (NYSE:GIS) Future?
Since General Mills Inc (NYSE:GIS) released its earnings in May 2018, the consensus outlook from analysts appear bearish, with earnings expected to decline by -13.65% in the upcoming year compared with the past 5-year average growth rate of 0.69%. Presently, with latest-twelve-month earnings at US$2.13b, we should see this fall to US$1.84b by 2019. Below is a brief commentary around General Mills’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for General Mills
What can we expect from General Mills in the longer term?
The longer term expectations from the 16 analysts of GIS is tilted towards the negative sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of GIS’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of -1.47% based on the most recent earnings level of US$2.13b to the final forecast of US$2.07b by 2021. EPS reaches $3.45 in the final year of forecast compared to the current $3.69 EPS today. The bottom-line decline seems to be caused by top-line expansion of 3.66%, which is predicted to lag cost growth leading up to 2021. Furthermore, the current 13.54% margin is expected to contract to 11.63% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For General Mills, there are three essential factors you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is General Mills worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether General Mills is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of General Mills? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
