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

Zacks Equity Research

General Mills (GIS) closed the most recent trading day at $50, moving -1.01% from the previous trading session. This change lagged the S&P 500's daily gain of 0.56%. At the same time, the Dow added 0.49%, and the tech-heavy Nasdaq gained 1.01%.

Coming into today, shares of the maker of Cheerios cereal, Yoplait yogurt and other packaged foods had lost 8.15% in the past month. In that same time, the Consumer Staples sector lost 2.46%, while the S&P 500 gained 1.38%.

Investors will be hoping for strength from GIS as it approaches 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%. Our most recent consensus estimate is calling for quarterly revenue of $4.43 billion, up 0.44% from the year-ago period.

GIS's full-year Zacks Consensus Estimates are calling for earnings of $3.36 per share and revenue of $17.31 billion. These results would represent year-over-year changes of +4.35% and +2.63%, respectively.

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.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% lower within the past month. GIS currently has a Zacks Rank of #3 (Hold).

Investors should also note GIS's current valuation metrics, including its Forward P/E ratio of 15.01. This represents a discount compared to its industry's average Forward P/E of 18.43.

We can also see that GIS currently has a PEG ratio of 2.14. 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. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 2.46 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 177, which puts it in the bottom 31% 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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