Tuesday, February 20, 2024
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Can General Mills dish out any more delectable profits?

Seven important earnings reports are scheduled for the week that comes to a close the second quarter of this year. This week, two Dow Jones industrials, a major chipmaker, and the largest seller of alcoholic beverages based in the United States, will report quarterly results.

Carnival reported a smaller-than-expected adjusted loss of $0.31 per share on revenue of $4.9 billion, which was also higher than the Wall Street consensus estimate of $4.8 billion, before the opening of U.S. markets on Monday. The stock fell nearly 9% shortly after the opening bell despite optimistic projections for the remainder of fiscal 2023.

Walgreens, a component of the Dow, and General Mills Inc., a major consumer staples company, will release quarterly reports before markets open on Tuesday. On Wednesday morning, earnings are expected to be reported by GIS).

Over the past year, the food products giant’s shares have gained nearly 18%, significantly more than the Consumer Staples Select Sector SPDR Fund’s 8% gain (NYSE: XLP). Over the past three months, General Mills stock has fallen by approximately 1%, trailing XLP’s gain of approximately 3.2%.

General Mills CEO Jeffrey Harmening stated earlier this month at a Deutsche Bank global consumer conference in Paris that General Mills is regaining productivity momentum now that the supply chain snarls are being resolved. When the company releases its financial results on Wednesday, prior to the opening of U.S. markets, Wall Street anticipates that the streak of quarterly profits exceeding estimates will continue.

The stock is still getting little attention despite its strong performance. Only four of the 20 analysts who cover the shares give the stock a Buy or Strong Buy rating, while 11 of them have a Hold rating. Based on the median price target of $84.00, which it currently carries, the upside potential is 3.3%. The implied upside is 19.3% at the high target of $97.00.

Revenue for the fourth quarter of the fiscal year is anticipated to be $5.17 billion, which represents a 1.0% sequential increase and a 5.7% annual increase. Adjusted EPS are anticipated to be $1.06, an increase of 9.7% sequentially but a decrease of 5.4% year over year. EPS of $4.24, an increase of 7.7%, is predicted by current estimates for the 2023 fiscal year, which ended in May, on sales of $20.23 billion, an increase of approximately 6.5 percent.

The stock of General Mills is valued at 19.2 times the expected earnings per share in 2023, 18.1 times the expected earnings of $4.49 in 2024, and 17.1 times the expected earnings of $4.77 in 2025. $68.82 to $90.89 is the 52-week trading range for it. General Mills pays a $2.16 dividend per year, yielding 2.66 percent. The previous year’s total shareholder return was 21.07 percent.