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General Mills (GIS) Gains But Lags Market: What You Should Know

Zacks Equity Research

General Mills (GIS) closed at $52.72 in the latest trading session, marking a +0.06% move from the prior day. This move lagged the S&P 500's daily gain of 0.75%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 1.32%.

Coming into today, shares of the maker of Cheerios cereal, Yoplait yogurt and other packaged foods had gained 3.09% in the past month. In that same time, the Consumer Staples sector lost 0.53%, while the S&P 500 gained 3.42%.

GIS will be looking to display strength as it nears its next earnings release. On that day, GIS is projected to report earnings of $0.89 per share, which would represent year-over-year growth of 4.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.43 billion, up 0.46% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.37 per share and revenue of $17.31 billion, which would represent changes of +4.66% and +2.64%, respectively, from the prior year.

Any recent changes to analyst estimates for GIS should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.18% higher. GIS is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, GIS currently has a Forward P/E ratio of 15.52. For comparison, its industry has an average Forward P/E of 18.9, which means GIS is trading at a discount to the group.

It is also worth noting that GIS currently has a PEG ratio of 2.22. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Food - Miscellaneous industry currently had an average PEG ratio of 2.39 as of yesterday's close.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 104, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GIS in the coming trading sessions, be sure to utilize Zacks.com.


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