General Mills Price Target Lowered: Stifel Cuts Estimate to $72

Stifel analyst Matthew Smith has lowered the firm's price target on General Mills (GIS) to $72 from $78, while maintaining a Buy rating on the shares. The reduction reflects a more cautious outlook on the company's future prospects, as the analyst notes that the Food group's valuation discount to historical levels is primarily reflecting concerns about the weak revenue outlook and reinvestment requirements pressuring margins. Despite the compelling valuation in relation to history, Stifel remains cautious given the uncertainty in revenue growth pacing in 2025.



The analyst estimates 3% EPS growth in 2025 in constant currency for the group, supported by 2% organic sales growth, partially offset by margin compression due to inflation and higher investment levels. This suggests that while the market still sees potential in General Mills, there are valid concerns about its ability to deliver consistent growth in the near term.

Stifel's price target reduction comes amidst a broader market sentiment that reflects uncertainty about the company's future prospects. The firm's valuation remains compelling in relation to history for the food stocks, but Stifel's caution regarding the uncertainty in revenue growth pacing in 2025 indicates that potential investors should be aware of the risks associated with the company's outlook.

For potential investors, the new price target of $72 may serve as a benchmark for evaluating the stock's performance and determining whether to buy, sell, or hold the shares. If the stock price appreciates above the $72 target, it may indicate that the market has a more optimistic outlook on the company's prospects than Stifel. Conversely, if the stock price depreciates below the $72 target, it may suggest that the market is less confident in the company's outlook than Stifel.

In conclusion, Stifel's price target reduction for General Mills reflects the market's cautious outlook on the company's future prospects, as investors grapple with concerns about the weak revenue outlook and reinvestment requirements pressuring margins. While the firm's valuation remains compelling in relation to history, potential investors should be aware of the risks associated with the company's outlook and use the new price target as a benchmark for evaluating the stock's performance.