Zacks Investment Research Downgrades General Mills (GIS) to Sell

General Mills (NYSE:GIS) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued on Tuesday.

According to Zacks, “General Mills' consumer-focused innovation, marketing initiatives and robust restructuring savings are making up for the tepid revenue growth. The company is currently pursuing several initiatives focused on improving operational efficiency to generate cost savings and support its key growth strategies. That said, sales and profits at the company’s North America Retail segment, contributing 64.8% to its sales, have been soft. The North American food industry has seen sluggish growth and slowdown in consumption over the last few quarters owing to changes in consumer preference. General Mills' shares have underperformed the industry in the last six months. Meanwhile, earnings estimates have moved 2.5% down for the current year and 6.5% for the next over the last 30 days, reflecting analysts' apprehensions over the stock’s earnings prospect.”

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Several other analysts also recently issued reports on GIS. Barclays reissued a “hold” rating and set a $48.00 target price on shares of General Mills in a research note on Friday, March 23rd. TheStreet downgraded shares of General Mills from a “b-” rating to a “c+” rating in a research note on Monday, April 2nd. UBS raised shares of General Mills from a “neutral” rating to a “positive” rating in a research note on Friday, March 23rd. Susquehanna Bancshares raised shares of General Mills from a “neutral” rating to a “positive” rating in a research note on Friday, March 23rd. Finally, Piper Jaffray dropped their price target on shares of General Mills from $49.00 to $47.00 and set a “neutral” rating on the stock in a research note on Wednesday, March 28th. Two investment analysts have rated the stock with a sell rating, fourteen have issued a hold rating and seven have assigned a buy rating to the stock. The company presently has an average rating of “Hold” and a consensus price target of $53.71.

Shares of NYSE:GIS opened at $44.73 on Tuesday. The company has a debt-to-equity ratio of 1.34, a quick ratio of 0.45 and a current ratio of 0.69. General Mills has a 12-month low of $43.84 and a 12-month high of $60.69. The firm has a market cap of $25,743.54, a price-to-earnings ratio of 14.52, a PEG ratio of 2.03 and a beta of 0.76.

General Mills (NYSE:GIS) last announced its earnings results on Wednesday, March 21st. The company reported $0.79 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.78 by $0.01. General Mills had a net margin of 13.96% and a return on equity of 37.64%. The company had revenue of $3.88 billion for the quarter, compared to the consensus estimate of $3.87 billion. During the same period in the previous year, the business earned $0.72 EPS. The company’s revenue was up 2.3% on a year-over-year basis. sell-side analysts forecast that General Mills will post 3.09 earnings per share for the current fiscal year.

General Mills declared that its board has approved a stock buyback program on Friday, February 23rd that allows the company to buyback outstanding shares. This buyback authorization allows the company to repurchase shares of its stock through open market purchases. Shares buyback programs are typically a sign that the company’s board of directors believes its stock is undervalued.

A number of institutional investors have recently bought and sold shares of GIS. Dimensional Fund Advisors LP increased its position in General Mills by 3.3% during the third quarter. Dimensional Fund Advisors LP now owns 1,577,976 shares of the company’s stock worth $81,681,000 after buying an additional 49,734 shares during the last quarter. Shufro Rose & Co. LLC increased its position in General Mills by 337.3% during the third quarter. Shufro Rose & Co. LLC now owns 52,470 shares of the company’s stock worth $2,716,000 after buying an additional 40,470 shares during the last quarter. Commerzbank Aktiengesellschaft FI increased its position in General Mills by 383.5% during the third quarter. Commerzbank Aktiengesellschaft FI now owns 365,635 shares of the company’s stock worth $18,925,000 after buying an additional 290,006 shares during the last quarter. Tredje AP fonden increased its position in General Mills by 48.6% during the third quarter. Tredje AP fonden now owns 77,901 shares of the company’s stock worth $4,032,000 after buying an additional 25,490 shares during the last quarter. Finally, HCR Wealth Advisors increased its position in General Mills by 21.4% during the third quarter. HCR Wealth Advisors now owns 6,159 shares of the company’s stock worth $289,000 after buying an additional 1,086 shares during the last quarter. 74.22% of the stock is currently owned by hedge funds and other institutional investors.

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General Mills Company Profile

General Mills, Inc manufactures and markets branded consumer foods in the United States. The company operates in four segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; and Asia & Latin America. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, shelf stable and frozen vegetables, and ice cream and frozen desserts, as well as grain, fruit and savory snacks; and various organic products, including nutrition bars, meal kits, salty snacks, and ready-to-eat cereal.

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