General Mills Stock Faces Pressure Despite Solid Earnings Results

General Mills stock faces downward pressure post-earnings. The recent results showed net sales up 2% and operating profits up 7.5%, but concerns over future performance impact investor sentiment.

Date: 10-02-2025

AI Rating: 5

Stock Performance and Market Comparison
General Mills has significantly underperformed the broader market over the past year, with a stock plunge of 7.7% compared to a 20.6% gain in the S&P 500 Index. The company’s performance also lagged behind the Invesco Food & Beverage ETF, which returned 5.2% during the same period.

Quarterly Results and Earnings Trend
In its recent Q2 results, General Mills reported net sales of $5.2 billion, representing a nearly 2% increase year-over-year, which surpassed expectations by 1.6%. The non-GAAP operating profits rose by 7.5% to $1.1 billion, also exceeding analyst projections. However, this strong performance is partially attributed to an increase in retailer inventory, a factor that may not sustain in the latter half of fiscal 2025.

Analyst Ratings and Future Outlook
For fiscal 2025, analysts forecast a 2.7% drop in EPS to $4.40. Despite a history of surpassing earnings estimates in previous quarters, the anticipated decline might affect stock performance. Current analyst consensus indicates a “Moderate Buy” rating based on a mix of “Strong Buy” and “Hold” ratings, showing some optimism despite the challenges.

Price Targets and Potential Upside
Following a recent analysis, the mean price target for GIS is set at $69.83, indicating an 18.7% premium over current levels. The highest target suggests a potential upside of 42.8%, which could attract investors looking for value in the stock.

Stocks: GIS