Briefing on the Fundamentals of General Mills (GIS)

General Mills logged a 2.85% change during today's premarket session, and is now trading at a price of $82.15 per share. The S&P 500 index moved 0.27% and the Nasdaq posted a 1.19% change.

General Mills shares moved 21.9% over the last 52 weeks, with a high of $87.79 and a low of $63.63. During this time, the stock outperformed the S&P 500 index by 34.98%. As of January 2022, the company's 50-day average price is $79.0. General Mills, Inc., is an American multinational manufacturer and marketer of branded consumer foods sold through retail stores. The large-cap Consumer Staples company is based in Minneapolis, MN. General Mills has returned a 2.68% dividend yield over the last 12 months.

Sustained EPS Growth with Reasonable Leverage Levels:

2019-05-26 2020-05-31 2021-05-30 2022-05-29
Revenue (MM) $2,044 $2,046 $2,189 $2,134
Revenue Growth n/a 0.08% 7.02% -2.51%
Operating Margins 123.09% 144.4% 143.65% 162.85%
Operating Margins Growth n/a 17.31% -0.52% 13.37%
Earnings Per Share $2.9 $3.57 $3.82 $4.48
EPS Growth n/a 23.1% 7.0% 17.28%
Diluted Shares (MM) 604 611 613 604
Free Cash Flow (MM) $2,269 $3,215 $2,452 $2,747
FCF Growth n/a 41.69% -23.73% 12.03%
Capital Expenditures (MM) $538 $461 $531 $569
Net Debt / EBITDA 0.35 -0.34 -0.25 2.21

General Mills Is Reasonably Valued:

Compared to the Consumer Staples sector's average of 24.36, General Mills has a trailing twelve month P/E ratio of 17.33 and, according to its EPS guidance of 4.41, an expected P/E ratio of 18.63. General Mills's PEG ratio is 3.47 based on its 5.0% annual average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

General Mills's P/B ratio is 4.818 compared to its sector average of 4.29. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 118.02% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 3.68 * 17.15) = $37.68

Most of the Market Indicators on General Mills Are Negative:

17 analysts are following General Mills and have set target prices ranging from $65.0 to $95.0 per share. On average, they have given the company a rating of hold. At the current price of $82.15, GIS is trading 0.83% away from its average analyst target price of $81.47 per share, implying an analyst consensus of little upside potential for the stock.

The company has an average amount of shares sold short since 2.13% of the company's shares are tied to short positions. Institutions own 79.7% of General Mills's shares, while the insider ownership rate stands at 0.18%. The biggest shareholder is Blackrock Inc. with a 10% stake in the company worth approximately $4,637,989,543.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.