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General Mills, Inc. (GIS) manufactures and markets branded consumer foods worldwide. It also supplies branded and unbranded food products to the foodservice and commercial baking industries. The company offers ready-to-eat cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and frozen vegetables, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks; and a range of organic products (including soup, granola bars, and cereals), ice cream and frozen desserts, and grain snacks.

It is scheduled to report its Q4 2012 results on June 27, 2012 before the market opens.

Recent EPS Actuals vs. Estimates

The company has failed to meet analysts' estimates in the last two quarters. In the last quarter it reported $0.55 EPS, failing to meet analyst estimates of $0.56.

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The consensus EPS is $0.59 based on 16 analysts' estimates, up from $0.52 a year ago. Revenue estimates are $4.11B, up from $3.63B a year ago. The median target price by analysts for the stock is $43.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On February 16, 2012, Calyon Securities (USA), Inc. upgraded the company from Moderate Sell to Moderate Buy.

Key Metrics

  • Market Cap: 24.62B
  • 52-week trading range: 34.64 - 41.06
  • Trailing P/E: 16.32
  • Forward P/E: 13.83
  • Price/Sales: 1.52
  • Price/Book: 3.56
  • PEG Ratio: 2.10
  • Total Debt: 7.63B
  • Annual dividend yield: 3.20%
  • Return on Equity: 21.93%
  • Return on Assets: 8.06%

Latest Developments

  • On May 24, 2012, General Mills, Inc. announced that it has signed a definitive agreement to acquire Yoki Alimentos S.A., a privately-held food company headquartered in Sao Bernardo do Campo, Brazil.
  • On May 22, 2012, General Mills, Inc. announced a productivity and cost savings plan designed to improve organizational effectiveness and focus on key growth strategies.
  • On May 15, 2012, General Mills, Inc. announced that for fiscal 2012, it expects to deliver adjusted diluted earnings per share (EPS) of $2.53 to $2.55. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $2.54 for fiscal 2012.
  • On February 17, 2012, General Mills, Inc. announced that it estimates that 2012 third-quarter adjusted diluted EPS will total $0.54-$0.56. The Company revised its fiscal 2012 adjusted diluted EPS guidance to $2.53-$2.55.
  • On February 13, 2012, Reuters reported that General Mills, Inc. agreed to buy Brazilian food company Yoki for 2 billion reais ($1.16 billion), in a move marking its return to Latin America's consumer market, a local newspaper reported on February 13, 2012.
  • On December 20, 2011, General Mills, Inc. announced that the Company's guidance for the second half of 2012 calls for double-digit growth in net sales and high single-digit to low double-digit growth in adjusted diluted earnings per share.

Competitors

General Mills, Inc. operates in Processed & Packaged Goods industry. The company could be compared to ConAgra Foods, Inc. (CAG), H. J. Heinz Company (HNZ), Kellogg Company (K), and Sara Lee Corp. (SLE). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

GIS Chart

GIS data by YCharts

Competitors' Latest Development

  • On June 5, 2012, The Coca-Cola Company, Ford Motor Company, H.J. Heinz Company, NIKE, Inc. and Procter & Gamble announced the formation of the Plant PET Technology Collaborative (PTC), a strategic working group focused on accelerating the development and use of 100% plant-based PET materials and fiber in their products.
  • On June 1, 2012, Sara Lee Corporation announced that its board of directors has unanimously approved the separation of its international Coffee & Tea business ("CoffeeCo") from Sara Lee Corp.
  • On May 31, 2012, Procter & Gamble Co announced that it has completed the sale of its Pringles business to Kellogg Company in a $2.695 billion all-cash transaction effective June 1, 2012.
  • On May 24, 2012, H.J. Heinz Co announced that it expects organic sales growth of at least 4% and constant currency EPS growth of 5%-8% ($3.52 to $3.62) from continuing operations, excluding special charges in fiscal 2012.
  • On May 24, 2012, H.J. Heinz Co announced that its Board of Directors has approved a 7.3% increase in the annualized common stock dividend. The quarterly common stock dividend will increase from $0.48 to $0.515 per share quarterly for all shareholders of record as of June 24, 2012, payable July 10, 2012.
  • On May 22, 2012, ConAgra Foods, Inc. announced that it has acquired Kangaroo Brands` pita chip business. Based in Milwaukee, WI, Kangaroo Brands is in private label pita chips and generates approximately $20 million in annual revenue.
  • On May 16, 2012, Sara Lee Corporation announced that it has closed a private placement of $650 million of senior notes. The offering consisted of $232,000,000 of 3.60% senior notes due May 15, 2019, $120,000,000 of 3.81% senior notes due May 15, 2020, $124,000,000 of 4.03% senior notes due May 15, 2021, and $174,000,000 of 4.20% senior notes due May 15, 2022 (collectively, the Notes).
  • On May 15, 2012, ConAgra Foods, Inc. announced that it has closed its acquisition of Odom's Tennessee Pride, a producer of frozen and refrigerated breakfast sandwiches and sausage.
  • On May 3, 2012, Sara Lee Corporation updated fiscal 2012 guidance. The Company expects adjusted EPS to fall in the middle of the $0.89-$0.95 range. The Company expects net sales and operating income will meet objectives at the low end of their respective guidance ranges.
  • On April 23, 2012, Kellogg Company lower fiscal 2012 earnings guidance and expects reported earnings, which include the expected impact of the acquisition of Pringles, to be in a range of $3.18 to $3.30 per share.
  • On April 17, 2012, ConAgra Foods, Inc. announced that it has agreed to acquire Odom's Tennessee Pride, a producer of frozen and refrigerated breakfast sandwiches and sausage.
  • On April 10, 2012, Sara Lee Corporation announced the acquisition of Expresso.Coffee, a business specialized in selling espresso coffee in the out-of-home small business, vending and bakeries (padarias) segments in Brazil, for an undisclosed amount.
  • On April 5, 2012, ConAgra Foods, Inc. announced that the board of directors have approved a dividend payment of $0.24 per common share to be paid on June 1, 2012, to stockholders of record at the close of business on April 30, 2012.
  • On March 27, 2012, BM&FBovespa (Bovespa) announced that, on April 4, 2012, the Brazilian Depositary Receipts (BDRs) Level I of H J Heinz Co will start being traded on Bovespa's over-the-counter (OTC) market, quoted in BRL per unit and with standard trading lot of 100 BDRs, under the ticker HNZB11.
  • On March 6, 2012, ConAgra Foods, Inc. announced that it has completed its acquisition of Del Monte Canada, based in Toronto, Canada, from an affiliate of Sun Capital Partners.
  • On March 2, 2012, Sara Lee Corporation announced that it has received a Private Letter Ruling and is now able to provide additional details about spin-off of international Coffee & Tea business.
  • On February 17, 2012, Kellogg Company announced that its Board of Directors declared a dividend of $0.43 per share on the common stock of the Company, payable on March 15, 2012, to shareowners of record at the close of business on March 1, 2012.
  • On February 17, 2012, H J Heinz Co announced that it is narrowing its fiscal 2012 EPS outlook to a range of $3.32 to $3.34 on a reported basis, excluding the charges for productivity initiatives.
  • On February 15, 2012, Kellogg Company announced that it has entered into an agreement to acquire Procter & Gamble's Pringles business for $2.695 billion. The companies expect to complete the transaction in the summer of 2012, pending necessary regulatory approvals.
  • On February 2, 2012, Kellogg Company reaffirmed its fiscal 2012 guidance for internal net sales growth, which is expected to increase by 4% to 5%, greater than long-term annual targets and reflecting both improvement in price/mix and a stronger innovation pipeline.
  • On February 2, 2012, Sara Lee Corporation reaffirmed fiscal 2012 guidance and expects adjusted earnings per share in the range of $0.89-$0.95, net sales of $7.9-$8.15 billion and adjusted operating income (including acquisitions) in the range of $875-$930 million.
  • On January 26, 2012, Sara Lee Corporation announced that the Board of Directors has declared a regular quarterly dividend of $.115 per share on the corporation`s common stock, payable on April 9, 2012.
  • On January 26, 2012, Sara Lee Corporation announced that it has agreed to enter into a nine-year exclusive partnership with Philips on Philips-branded consumer coffee systems that will drive innovation and expansion into new markets for its SENSEO coffee brand.
  • On January 4, 2012, The J.M. Smucker Company announced that it has completed the acquisition of a majority of the North American foodservice coffee and hot beverage business of Sara Lee Corporation (Sara Lee) in an all cash transaction.
  • On January 3, 2012, Sara Lee Corporation announced that it has acquired Tea Forté, a Massachusetts based company in the ultra-premium tea category, for an undisclosed sum.
  • On December 20, 2011, ConAgra Foods, Inc. announced that the Company continues to expect fiscal 2012 full-year diluted earnings per share , adjusted for items impacting comparability, to grow at a low- to mid-single-digit rate over the comparable $1.75 earned last fiscal year.

Technical Insight


The stock has recently broke the triangle south which was forming since the October 2011. However, it bounced north from the strong support at around $37.50. It is currently trading below 20, 50, and 200 SMA on the daily chart.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: General Mills