General Mills Faces Challenges with Declining Sales and Volumes Across Key Segments, Hold Rating Reiterated

In a report released today, Robert Dickerson from Jefferies reiterated a Hold rating on General Mills (GIS – Research Report), with a price target of $62.00.

Robert Dickerson has given his Hold rating due to a combination of factors impacting General Mills. The company’s management comments at CAGNY suggested a potential guidance cut, as retail sales trends for ready-to-eat cereal and snack bars have worsened from the previous quarter. Despite increased price investments, there has been no visible improvement in volume, indicating that the strategy might not be effective. The company’s North American retail segment has experienced a decline in both pricing and volumes year-over-year, with significant volume share losses in key categories like cereal, granola bars, and soup.
Additionally, the pet segment has shown pressure, particularly in pet treats and the Blue Wilderness line, with sales and volumes declining despite price reductions. The recent acquisition of Whitebridge Pet may offer some growth opportunities, but overall, the consumption trends suggest that a return to growth is likely delayed. Consumers are still managing their grocery budgets closely, and further price investments may be necessary. Therefore, Dickerson reiterates a Hold rating with a price target of $62.

In another report released on March 2, RBC Capital also maintained a Hold rating on the stock with a $70.00 price target.