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General Mills (GIS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

General Mills (GIS) closed the most recent trading day at $51.38, moving +0.39% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.37%. Meanwhile, the Dow gained 0.42%, and the Nasdaq, a tech-heavy index, added 0.56%.

Coming into today, shares of the maker of Cheerios cereal, Yoplait yogurt and other packaged foods had lost 4.7% in the past month. In that same time, the Consumer Staples sector lost 1.56%, while the S&P 500 gained 4.42%.

GIS will be looking to display strength as it nears its next earnings release. In that report, analysts expect GIS to post earnings of $0.88 per share. This would mark year-over-year growth of 3.53%. Meanwhile, our latest consensus estimate is calling for revenue of $4.43 billion, up 0.44% from the prior-year quarter.

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.

Any recent changes to analyst estimates for GIS should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.11% lower within the past month. GIS is currently a Zacks Rank #3 (Hold).

Digging into valuation, GIS currently has a Forward P/E ratio of 15.22. This represents a discount compared to its industry's average Forward P/E of 18.03.

We can also see that GIS currently has a PEG ratio of 2.17. 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. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 2.47 based on yesterday's closing prices.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 100, which puts it in the top 40% 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.

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

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