General Mills: Promotional Dependence, Margin Pressure, and Weak EPS Outlook Justify Sell Rating

Morgan Stanley analyst Megan Alexander maintained a Sell rating on General Mills yesterday and set a price target of $48.00.

Megan Alexander has given his Sell rating due to a combination of factors tied to the quality and sustainability of General Mills’ recent results. While the company reported earnings per share meaningfully above expectations, much of this outperformance stems from timing-related benefits that management itself anticipates will reverse in the coming quarter, with full-year guidance left unchanged. Organic sales trends did improve sequentially and volume performance was better than feared, but overall growth remains slightly negative, and the company is relying more on promotional activity to support demand, especially among lower- and middle-income consumers.

This heavier dependence on discounts increases the cost of maintaining volumes and implies continued pressure on margins and limited profit leverage even if top-line trends stabilize. In addition, the reaffirmation of longer-term guidance, including a notable decline in EPS for FY26, underscores a weak earnings outlook relative to the current valuation. Taken together, these dynamics suggest constrained upside for the stock and a risk that profitability will remain under strain, supporting Alexander’s view that investors are better off avoiding or reducing exposure to General Mills at this time.

In another report released on December 11, UBS also assigned a Sell rating to the stock with a $47.00 price target.

Based on the recent corporate insider activity of 89 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GIS in relation to earlier this year.