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Is General Mills (GIS) Stock Undervalued Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is General Mills (GIS). GIS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 15.73 right now. For comparison, its industry sports an average P/E of 17.23. Over the last 12 months, GIS's Forward P/E has been as high as 16.29 and as low as 11.53, with a median of 14.37.

We also note that GIS holds a PEG ratio of 2.25. 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. GIS's industry currently sports an average PEG of 2.56. Over the last 12 months, GIS's PEG has been as high as 2.33 and as low as 1.49, with a median of 1.82.

These are just a handful of the figures considered in General Mills's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GIS is an impressive value stock right now.


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