Analyst Thomas Palmer of J.P. Morgan maintained a Sell rating on General Mills, retaining the price target of $45.00.
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Thomas Palmer has given his Sell rating due to a combination of factors impacting General Mills. The company is facing challenges with its organic sales growth, which has historically led to stock declines post-earnings. Despite a strong track record of EPS beats, the stock has often traded lower following earnings announcements, particularly when sales figures fall short of expectations. Additionally, the recent trends in consumption appear to be lagging behind consensus estimates, raising concerns about future performance.
Palmer also notes that while General Mills has made investments to support its growth outlook, the benefits from these investments seem limited. The company’s guidance has been disappointing, with cuts in FY25 and a lackluster FY26 outlook. Furthermore, the divestiture of higher-growth segments and ongoing challenges in certain categories, like dog food, contribute to a cautious view. Despite these issues, General Mills shares are trading at a premium compared to its low-growth peers, which Palmer believes is unwarranted given the current challenges.
Palmer covers the Consumer Defensive sector, focusing on stocks such as JM Smucker, General Mills, and McCormick & Company. According to TipRanks, Palmer has an average return of -1.0% and a 41.59% success rate on recommended stocks.