Bear of the Day: General Mills (GIS)
General Mills GIS is a global manufacturer and marketer of branded consumer foods sold through retail stores.
Its principal product categories include ready-to-eat cereals, convenient meals, snacks, yogurt, super-premium ice creams, baking mixes and ingredients, and more. Analysts have taken a bearish stance on the company’s outlook, landing it into a Zack Rank #5 (Strong Sell).
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Let’s take a closer look at the company.
GIS Shares Face Pressure
GIS shares have faced consistent selling pressure over the last year, down 26% compared to the S&P 500’s impressive 17% gain. Quarterly results haven’t been enough to boost performance, despite GIS regularly exceeding consensus EPS expectations over recent years.
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Organic net sales were down 3% year-over-year in its latest period, driven by lower volumes and an unfavorable price mix. The company’s profitability has also taken a notable hit, with its gross margin falling 340 basis points to 32.4% throughout the above-mentioned quarter.
The profitability hit is certainly notable, helping explain the poor share performance and downward revisions. Operating profit of $504 million fell 35% year-over-year. Still, CEO Jeff Harmening remains positive, stating –
“With a clear framework centered on remarkability and positive early returns from our Q4 investments, I’m confident our fiscal 2026 plans will put us on a path back to driving long-term growth in line with our shareholder return model.”
The company’s next release is slated for mid-September, with sales revisions also showing a similarly bearish nature as the EPS outlook.
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Bottom Line
Negative earnings estimate revisions paint a challenging picture for the company’s shares in the near term.
General Mills GIS is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
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General Mills, Inc. (GIS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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