General Mills stock target raised to $70 on strong Q3 results
GIS
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On Thursday, Deutsche Bank updated its outlook on General Mills (NYSE:GIS) shares, raising the price target to $70 from $68 while maintaining a Hold rating on the stock. The adjustment follows General Mills’ fiscal third-quarter earnings, which surpassed expectations with earnings per share (EPS) of $1.17 compared to the anticipated $1.05.
The performance of General Mills in the recent quarter was attributed to several factors. Notably, the North America Retail segment saw a modest increase in retailer inventory, high single-digit growth in Canada, and mid single-digit growth in non-measured channels.
Additionally, the Pet segment experienced fewer inventory headwinds than anticipated. The company also benefited from favorable selling, general and administrative (SG&A) expenses due to lower incentive compensation accruals.
Despite the positive quarter, General Mills’ management has reiterated its full-year guidance, which remains unchanged since the Consumer Analyst Group of New York (CAGNY) conference. The forecast includes a range of -1% to flat organic growth, along with a projected increase of 4%-5% in both adjusted operating profit and EPS.
The projection for the upcoming fiscal fourth quarter suggests a more conservative outlook, with expectations of organic declines between -5.1% and -1.1%, operating profit ranging from $793 million to $827 million, and EPS between $0.96 and $1.01. This forecast falls below the consensus, indicating a cautious stance for the closing quarter of the fiscal year.
