Based in Minneapolis, Minnesota, General Mills, Inc. (GIS) manufactures and markets branded consumer foods. Valued at a market cap of $40.8 billion, the company’s principal product categories include ready-to-eat cereals, convenient meals, snacks, yogurt, super-premium ice creams, baking mixes and ingredients, and pet food products as well.
Companies worth more than $10 billion are generally labeled as “large-cap” stocks and General Mills fits this criterion perfectly. The company is renowned for its quality, innovation, and more than 100 beloved brands including Cheerios, Pillsbury, Betty Crocker, Nature Valley, Blue Buffalo, and Annie's.
Despite a 3.8% decline from its 52-week high of $75.90 reached on Sep. 10, shares of this food company have gained 11.3% over the past three months, surpassing the First Trust Nasdaq Food & Beverage ETF (FTXG) 8.8% return over the same time frame.
In the longer term, GIS stock is up 12.1% on a YTD basis, outpacing FTXG’s 5.6% gains. Moreover, shares of GIS have risen 11.5% over the past 52 weeks, compared to FTXG’s 2.3% returns over the same time frame.
Since late July, GIS has been trading above its 200-day and 50-day moving averages, indicating a bullish trend.
General Mills has been outperforming due to its ability to leverage falling input costs to enhance margins, successfully implement strategic price increases, and benefit from its strong brand portfolio, particularly in the packaged food sector.
Yet, the stock took a nosedive on Jun. 26, plunging nearly 4.6% following its Q4 earnings release due to a year-over-year decline in revenues and earnings while missing consensus revenue estimates. This was driven by a decrease in revenues from North American retail, International, and pet segments, fueled by adverse net price realization and mix and reduced pound volume. Plus, the company’s weak full-year performance further dampened investor confidence.
While the company has outperformed most of its industry peers, GIS stock appears to be lagging behind its rival, Campbell Soup Company (CPB), which gained almost 16% on a YTD basis and 17.4% over the past 52 weeks.
Nevertheless, Wall Street analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering the stock, and as of writing, the company is trading above its mean price target of $69.22.
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