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The Minneapolis, Minnesota-based company General Mills is expected to report its fiscal fourth-quarter earnings of $0.85 per share, which represents a year-over-year decline of over 20%, down from $1.10 per share seen in the same period a year ago.
The consumer foods manufacturer’s revenue would decline over 14% year-over-year to $4.3 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 6%.
General Mills shares rose over 2% so far this year. The stock traded 1.1% higher at $60.26 on Monday
“Mills reports Q4’21 results this Wednesday. Although cost inflation concerns remain front and center, we believe General Mills could be better equipped to manage given productivity, pricing, mix, and restructuring benefits, all while C-Stores/Foodservice is improving and Pet is grinding on all cylinders, leaving the FAH reversal not entirely dire. We simply remain sidelined given NT cost pressure risk,” noted Rob Dickerson, equity analyst at Jefferies.
“Looking for $3.65 in FY’22 EPS; $63 PT; remain sidelined. After factoring in the Tyson treats acquisition, recent restructuring cash costs, and the European yogurt divestment, our $3.65 FY’22 EPS forecast remains unchanged. Although the setup seems better here relative to other large-cap food companies, we’re still sidelined given NT cost pressures and valuation. We now value the shares off 13.5x EBITDA vs. current market 13x, as we believe strategic shifts warrant a slight premium to the group.”
General Mills Stock Price Forecast
Three analysts who offered stock ratings for General Mills in the last three months forecast the average price in 12 months of $66.00 with a high forecast of $69.00 and a low forecast of $63.00.
The average price target represents 9.47% from the last price of $60.29. Of those three analysts, two rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the stock price forecast of $57 with a high of $79 under a bull scenario and $37 under the worst-case scenario. The firm gave an “Equal-weight” rating on the food company’s stock.
“We forecast slight LT organic sales growth after outsized +4% FY20 organic growth on COVID related demand, with muted category and geographic growth. GIS also has a limited margin expansion opportunity (we model +10 bps/yr) with an already efficient cost structure, and we worry about GM pressure given higher commodities,” noted Dara Mohsenian, equity analyst at Morgan Stanley.
Several other analysts have also updated their stock outlook. Jefferies raised the price target to $63 from $62. JP Morgan lifted the target price to $58 from $57. Credit Suisse increased the target price to $68 from $64.
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This article was originally posted on FX Empire