Now trading at a price of $64.52, General Mills has moved -0.7% so far today.
General Mills returned losses of -24.0% last year, with its stock price reaching a high of $90.89 and a low of $60.33. Over the same period, the stock underperformed the S&P 500 index by -41.0%. As of April 2023, the company's 50-day average price was $64.18. General Mills, Inc. manufactures and markets branded consumer foods worldwide. Based in Minneapolis, MN, the large-cap Consumer Staples company has 34,000 full time employees. General Mills has offered a 3.4% dividend yield over the last 12 months.
The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $15,740 | $16,865 | $17,627 | $18,127 | $18,993 | $20,094 |
| Revenue Growth | n/a | 7.15% | 4.51% | 2.84% | 4.78% | 5.8% |
| Gross Margins | 34% | 34% | 35% | 36% | 34% | 33% |
| Operating Margins | 15% | 15% | 17% | 17% | 18% | 17% |
| Net Margins | 14% | 11% | 13% | 13% | 14% | 13% |
| Net Income (MM) | $2,163 | $1,786 | $2,211 | $2,346 | $2,735 | $2,610 |
| Net Interest Expense (MM) | $374 | $522 | $466 | $420 | $380 | $382 |
| Depreciation & Amort. (MM) | $619 | $620 | $595 | $601 | $570 | $547 |
| Earnings Per Share | $3.64 | $2.9 | $3.56 | $3.78 | $4.42 | $4.3100000000000005 |
| EPS Growth | n/a | -20.33% | 22.76% | 6.18% | 16.93% | -2.49% |
| Diluted Shares (MM) | 586 | 605 | 613 | 619 | 613 | 601 |
| Free Cash Flow (MM) | $2,218 | $2,269 | $3,215 | $2,452 | $2,747 | $2,089 |
| Capital Expenditures (MM) | $623 | $538 | $461 | $531 | $569 | $690 |
| Current Ratio | 0.58 | 0.61 | 0.76 | 0.85 | 0.58 | 0.72 |
| Long Term Debt (MM) | $12,669 | $11,625 | $10,929 | $9,787 | $9,135 | $10,524 |
| Net Debt / EBITDA | 4.87 | 4.4 | 3.04 | 3.29 | 2.8 | 2.96 |
General Mills has growing revenues and a flat capital expenditure trend and wider gross margins than its peer group. Additionally, the company's financial statements display decent operating margins with a stable trend and positive EPS growth. However, the firm has a highly leveraged balance sheet. Finally, we note that General Mills has irregular cash flows.
A Very Low P/E Ratio but Trades Above Its Graham Number:
General Mills has a trailing twelve month P/E ratio of 15.7, compared to an average of 21.21 for the Consumer Staples sector. Based on its EPS guidance of $4.71, the company has a forward P/E ratio of 13.6. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 2.9%. On this basis, the company's PEG ratio is 5.48, which suggests that it is overpriced. In contrast, the market is likely undervaluing General Mills in terms of its equity because its P/B ratio is 3.65 while the sector average is 4.12. The company's shares are currently trading 57.7% above their Graham number.
Analysts Give General Mills an Average Rating of Hold:
The 17 analysts following General Mills have set target prices ranging from $58.0 to $77.0 per share, for an average of $69.65 with a hold rating. As of April 2023, the company is trading -7.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.
General Mills has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 79.1% of the company's shares, and the insider ownership rate stands at 0.23%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 10% stake in the company is worth $3,643,819,974.
