On Thursday, Stifel financial analysts increased their price target for General Mills (NYSE:GIS) shares to $82, up from the previous $70, while maintaining a Buy rating on the stock. The adjustment follows General Mills' first-quarter fiscal year 2025 earnings per share (EPS), which aligned with market projections. The company's organic sales saw a slight decline of 1%, attributed to stable volume and a 1 percentage point impact from price and product mix, primarily due to a negative mix.
The company's North America Retail segment's performance echoed the previous quarter's results, which met expectations. Analysts predict that General Mills' volume will show an upward trend for the remainder of fiscal year 2025, spurred by heightened investment and product innovation.
Despite the flat organic sales, General Mills has confirmed its financial outlook for the fiscal year 2025, projecting organic sales to remain steady or rise by up to 1% and EPS to vary between a 1% decrease and a 1% increase on a constant currency basis.
Analysts anticipate a modest uptick in organic sales growth, with the second half of the fiscal year likely to show improvement in market share trends, which is expected to compensate for any declines witnessed in the first half of the year. The company's strategic investments and innovation are seen as key drivers for this anticipated growth. Following the evaluation of these factors, Stifel has decided to uphold its Buy rating for General Mills, alongside the increased price target of $82.
In other recent news, General Mills has been the focus of various analyst firms. Piper Sandler raised its price target on General Mills shares to $84, maintaining an Overweight rating, and Goldman Sachs (NYSE:GS) increased its target to $81, citing effective execution of the company's strategic plan. Mizuho also increased its target to $72, while maintaining a neutral stance. In contrast, Citi slightly reduced its target to $75 but maintained its neutral rating.
General Mills has reported its first volume growth in six quarters in its Pet segment and exceeded consensus estimates for its first-quarter sales and earnings per share for fiscal year 2025. The company also sold its North American Yogurt business to French dairy companies Lactalis and Sodiaal for $2.1 billion, a move projected to dilute its adjusted earnings per share by 3 percent in the first 12 months post-closure.
In addition, General Mills has appointed Asheesh Saksena as Chief Strategy & Growth Officer and is considering potential mergers and acquisitions in the $1 billion to $1.5 billion range.
InvestingPro Insights
Recent data from InvestingPro provides a deeper financial perspective on General Mills (NYSE:GIS). The company's market capitalization stands robust at $41.69 billion, with a solid Price to Earnings (P/E) ratio of 17.74, reflecting investor confidence in its earnings potential. Adjusted figures for the last twelve months as of Q4 2024 show a slightly more favorable P/E ratio of 15.4. Additionally, General Mills' commitment to shareholder returns is evident with a dividend yield of 3.2% as of the latest data, complementing the InvestingPro Tip that the company has raised its dividend for four consecutive years and has maintained dividend payments for an impressive 54 consecutive years.
InvestingPro Tips highlight that management's aggressive share buybacks and analysts' upward revisions for earnings in the upcoming period could signal confidence in the company's financial strategy and future performance. These strategic moves may be particularly relevant for investors considering the stock's proximity to its 52-week high, currently trading at 98.83% of this peak value.
For those seeking more detailed analysis and additional metrics, InvestingPro offers further tips on General Mills, which could provide valuable insights into the company's financial health and future prospects.
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