General Mills: Is now the time to buy at a bargain price?

Last Updated: 11. Januar 2024By

You may not know the name, but you have probably consumed something from this company. Because General Mills is one of the leading food conglomerates worldwide. The company produces and distributes ready-to-eat cereals, baked goods, ready-made meals, snacks, and dairy products. Some of the most well-known brands include Cheerios, Häagen-Dazs, Pillsbury, Annies, Old El Paso, and Betty Crocker.

Revenue decreases, profits increase The company reported an adjusted profit of $1.25 per share for the second quarter, up from $1.10 in the previous year. Analysts surveyed by Capital IQ had expected $1.16. Net sales for the quarter were $5.14 billion, compared to $5.22 billion in the same quarter last year. Analysts had predicted $5.36 billion. Overall, a mixed result.

Cost savings show effect „While we experienced a slower-than-expected volume recovery in the second quarter in a challenging consumer environment, we were able to achieve profit growth thanks to strong cost savings,“ said CEO Harmening.

Annual forecast for fiscal year 2024 lowered For the year, the company expects organic net sales to decline by 1% or remain stagnant. The previous annual forecast predicted growth of 3% to 4%. This makes it clear: The agricultural company can only grow through cost savings at the moment.

Does the downward trend offer a buying opportunity? Conclusion: The agricultural stock had a tough year. However, the downward trend has slowed down a bit and a bottom formation has been observed in recent weeks. Even analysts are not enthusiastic. Only 5 out of 21 analysts recommend buying, 13 hold, and 4 analysts still consider selling at this low level to be sensible. The average analyst price target is $68 (downgraded from $70), with the highest target at $82. You can alleviate the pain of the downtrend with a dividend yield of 3.74% – but is that enough of a reason to buy?