Susquehanna Thinks General Mills’ Stock is Going to Recover

In a report released today, Pablo Zuanic from Susquehanna reiterated a Buy rating on General Mills (NYSE: GIS), with a price target of $54. The company’s shares closed on Friday at $43.49, close to its 52-week low of $41.01.

Zuanic wrote:

“The share price performance post the 1Q print and conference call implies investors do not believe GIS will meet FY19 guidance. But management seems highly confident it will, given 1Q was either in line or above its own expectations, and because of visibility into the year ahead (our call took place one month into fiscal 2Q, and management implied it has a good read on future price/mix and distribution gains). While the issues for 2Q have been well advertised (gross margins still down; tough pet food sell-in comps), we would not wait to buy the stock post the 2Q print (mid-December). Even valuing GIS at a 10% discount to consumer staples (rather conservative given the above-average portfolio re franchise strength and growth potential), we arrive at a $54 price target (23% upside) by December ’19 on our CY20 estimates.”

According to, Zuanic is a 4-star analyst with an average return of 5.1% and a 44.7% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Constellation Brands Inc, and Anheuser-Busch Inbev Sa.

Currently, the analyst consensus on General Mills is a Hold with an average price target of $49.57.

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General Mills’ market cap is currently $25.92B and has a P/E ratio of 12.06. The company has a Price to Book ratio of 4.16.

Based on the recent corporate insider activity of 68 insiders, corporate insider sentiment is negative on the stock. Most recently, in August 2018, Heidi Miller, a Director at GIS sold 13,204 shares for a total of $604,215.

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General Mills, Inc. engages in the manufacture and marketing of branded consumer foods sold through retail stores. It operates through the following segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; and Asia & Latin America; and Pet.

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