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General Mills (GIS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

General Mills (GIS) closed at $52.36 in the latest trading session, marking a -0.27% move from the prior day. This move lagged the S&P 500's daily loss of 0.2%. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Heading into today, shares of the maker of Cheerios cereal, Yoplait yogurt and other packaged foods had lost 3.86% over the past month, lagging the Consumer Staples sector's loss of 0.42% and the S&P 500's gain of 7.08% in that time.

Investors will be hoping for strength from GIS as it approaches its next earnings release. The company is expected to report EPS of $0.88, up 3.53% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.43 billion, up 0.44% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.36 per share and revenue of $17.31 billion. These totals would mark changes of +4.35% and +2.63%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for GIS. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.11% lower. GIS is currently a Zacks Rank #3 (Hold).

In terms of valuation, GIS is currently trading at a Forward P/E ratio of 15.61. This represents a discount compared to its industry's average Forward P/E of 17.84.

Meanwhile, GIS's PEG ratio is currently 2.23. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Food - Miscellaneous industry currently had an average PEG ratio of 2.43 as of yesterday's close.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 147, putting it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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