GIS - General Mills is tipped by Argus for share price breakout

2023-07-14 08:23:34 ET

General Mills ( NYSE: GIS ) pushed higher in early trading on Friday after Argus upgraded the food stock to a Buy rating from Neutral following the recent share price underperformance.

Analyst Taylor Conrad noted that GIS is leveraging its biggest brands through promotions and new product innovation. The Minnesota-based food company is noted to be growing through acquisitions, including its recent purchase of TNT Crust, a manufacturer of frozen pizza crusts. GIS management is also said to be committed to controlling costs and boosting margins through its holistic margin management program.

"We like management's efforts to create a differentiated portfolio of brands for health-conscious customers and to generate a higher percentage of revenue from new products."

In a look at the financials, Conrad said GIS has a strong balance sheet, and management has signaled confidence in its outlook with a 9% hike in the dividend, which now yields about 3.1%. GIS is observed to be trading at 16X Argus' 2025 estimate, below the peer average of 18.

Looking ahead, General Mills ( GIS ) is seen as well positioned to leverage its brands and grow margins. Argus' price target of $90 implies a multiple of 19X the firm's 2025 EPS estimate.

Shares of General Mills ( GIS ) rose 0.97% premarket to $75.50 vs. the 52-week trading range of $72.16 to $90.89.

More on General Mills:

• General Mills: A Disappointing Quarter For Short-Term Investors And Speculators
• More articles from Seeking Alpha analysts
• Growth metrics on General Mills
• Seeking Alpha's Quant Rating for General Mills

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