Benzinga - General Mills (NYSE: GIS) advanced to a new all-time high following the FQ2 earnings release but has since retreated to retest support. The set-up has the market trading at the 150-day EMA and ready to fire another trend-following signal. The catalyst for this move could be the Q3 earnings due out later this week. The analysts expect big things from this company in 2023, and outperformance is possible. The company exhibits robust brand appeal and pricing power, which led to an increase in guidance last quarter. Assuming momentum is still building, the 2nd half could easily outpace the company's expectations.
"Amid ongoing volatility in the operating environment, we remain focused on driving our Accelerate strategy by investing in brand building and innovation, strengthening our capabilities, and continuing to reshape our portfolio. With strong first-half results and positive momentum on our business, we are increasing our full-year outlook for organic net sales, adjusted operating profit, and adjusted diluted EPS growth," said CEO Jeff Harmening in the Q2 report.
Analysts Support General Mills, Could Drive It Higher
The company upped its guidance for the year to organic revenue growth of 8% to 9%. The analysts upped their targets for Q1 to a range of 9% on the top line and for margin improvement to drive 9.5% growth on the bottom line. Growth is expected to accelerate again in Q4, so there is an expectation for solid guidance as well. That may be a problem should guidance not keep up with the current outlook.
General Mills Has Attractive Value/Yield Combination
The chart is favorable, but there is a risk. The analysts have set the bar high, arguably because of the guidance, and there is a chance for a miss or weak guidance. Absent those events, price action is set to move higher from this level which would be a trend-following signal. The next hurdle for price action will be near the $84 level. A move above that should get the market up to an all-time high. A new all-time high could be around the corner if the company shows additional momentum in the results.
The article "General Mills Retreats To Buy Zone Ahead Of Earnings " first appeared on MarketBeat.