GIS - General Mills upgraded as UBS forecast margin rebound

General Mills ( NYSE: GIS ) stock was boosted by an upgrade from UBS that suggested a double-digit decline in the past month has been deeper than the stock deserves.

The Swiss bank’s analysts noted that the stock has been the worst performer in their coverage since its late December earnings release. The research indicated that concerns about margin trends, especially in the pet business, have helped spark that decline.

“We think these fears are misplaced given the long runway for premiumization ahead driven by the humanization of pets trend and the NT visibility to margin recovery in the Pet segment,” the analysts said. “Meanwhile, we see a meaningful opportunity for GIS' Int'l margin to rebound as it laps the ice cream recall, driving 5% EBIT growth on a consolidated basis in both FY24 and FY25.”

The company is also expected to step up share repurchases in the coming year, according to the bank. As such, the team upgraded the stock to Buy from Hold and increased their price target to $88 from $85.

Shares of the Minnesota-based food manufacturer rose 1% in premarket trading on Friday.

Read more on recent food inflation trends .

For further details see: