GIS - General Mills Is Not Immune To The Current Inflationary Environment

• Bellwethers in the consumer staples sector such as General Mills don't seem like they're able to price successfully ahead of inflationary headwinds, and many are experiencing tremendous gross margin pressure.
• Branded staples may be experiencing demand (volume) destruction as consumers balk at price increases that still fall short of offsetting the heightened cost environment.
• Many consumer staples equities, including General Mills, have huge net debt positions and hefty dividend obligations, too.
• The outlook for many consumer staples entities is not pretty, and a company such as General Mills is not immune to the sector's troubles.
• We think General Mills is worth $62 per share, slightly lower than where shares are trading. The company sports a nice 3% dividend yield.

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