Analyst Robert Moskow of TD Cowen maintained a Hold rating on General Mills (GIS – Research Report), with a price target of $57.00.
Robert Moskow has given his Hold rating due to a combination of factors impacting General Mills’ financial outlook. The company recently missed its third-quarter sales targets and lowered its earnings guidance for fiscal year 2025, with expectations of further declines in fiscal year 2026. This is largely due to a strategic decision to invest in pricing and marketing to enhance consumer value, which is anticipated to result in a 9-10% reduction in core operating profit and a 200 basis point margin contraction over two years.
Additionally, General Mills is facing challenges such as unexpected retailer inventory reductions and increased competition, particularly in the snacking segment. Despite successful investments in brands like Pillsbury and Totino’s, these efforts have not been sufficient to offset the overall decline. The company is also planning administrative cost savings and potential job cuts to fund these investments, reflecting a need to adjust to the high prices set during the pandemic. These factors contribute to the Hold rating, as the company navigates through a period of financial restructuring and market challenges.
In another report released on March 17, Evercore ISI also maintained a Hold rating on the stock with a $68.00 price target.
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