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

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  • GIS

General Mills (GIS) closed at $64.44 in the latest trading session, marking a +0.33% move from the prior day. The stock lagged the S&P 500's daily gain of 1.17%. Meanwhile, the Dow gained 1.87%, and the Nasdaq, a tech-heavy index, added 0.57%.

Coming into today, shares of the maker of Cheerios cereal, Yoplait yogurt and other packaged foods had gained 2.52% in the past month. In that same time, the Consumer Staples sector lost 2.85%, while the S&P 500 lost 2.46%.

General Mills will be looking to display strength as it nears its next earnings release, which is expected to be December 21, 2021. On that day, General Mills is projected to report earnings of $1.05 per share, which would represent a year-over-year decline of 0.94%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.84 billion, up 2.53% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.79 per share and revenue of $18.24 billion, which would represent changes of 0% and +0.6%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for General Mills. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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. The Zacks Consensus EPS estimate has moved 0.16% lower within the past month. General Mills currently has a Zacks Rank of #4 (Sell).

In terms of valuation, General Mills is currently trading at a Forward P/E ratio of 16.94. For comparison, its industry has an average Forward P/E of 19.77, which means General Mills is trading at a discount to the group.

Meanwhile, GIS's PEG ratio is currently 2.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Food - Miscellaneous was holding an average PEG ratio of 2.47 at yesterday's closing price.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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