Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 30 Oct, 25 | GIS | Buy | USD 46.85 | USD 49.0 | USD 51.5 | 22 days | Closed |
4.59%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates through four segments: North America Retail; International; Pet; and North America Foodservice. It offers grain, ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream and frozen desserts, nutrition bars, and savory snacks, as well as various organic products, including frozen and shelf-stable vegetables. It also manufactures and markets pet food products, including dog and cat food. The company markets its products under the Annie's, Betty Crocker, Bisquick, Blue Buffalo, Blue Basics, Blue Freedom, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, EPIC, Fiber One, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto's, Go-Gurt, Gold Medal, Golden Grahams, Häagen-Dazs, Kitano, Kix, Lärabar, Latina, Lucky Charms, Muir Glen, Nature Valley, Nudges, Oatmeal Crisp, Old El Paso, Pillsbury, Progresso, Raisin Nut Bran, Total, Top Chews Naturals, Totino's, Trix, True Chews, Wanchai Ferry, Wheaties, Wilderness, Yoki, Reese's Puffs, Green Giant, and Yoplait trademarks. It sells its products directly, as well as through broker and distribution arrangements to grocery stores, mass merchandisers, membership stores, natural food chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores, as well as drug, dollar, and discount chains. In addition, the company operates ice cream parlors. General Mills, Inc. was founded in 1866 and is headquartered in Minneapolis, Minnesota.
Strong EPS Growth: Diluted EPS rose 116% year-over-year to USD 2.22 in Q1FY26, supported by higher operating income and a 4% reduction in average diluted shares outstanding
Surge in Operating Profit: Operating profit increased 108% to USD 1.7 billion in Q1FY26, primarily reflecting the USD 1.05 billion gain from the U.S. yogurt divestiture
Decline in Adjusted Operating Profit: Adjusted operating profit decreased 18% in constant currency to USD 711 million in Q1FY26, reflecting lower gross profit and higher input costs
Drop in Operating Cash Flow: Cash flow from operations fell to USD 397 million in Q1FY26 from USD 624 million in Q1FY25, driven by lower earnings and adverse working capital trends
General Mills faces near-term profitability risk due to increased input cost inflation, portfolio divestiture impacts, and elevated reinvestment in brand innovation that may pressure margins before yielding sustainable volume growth.
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 46.85 | 40.0 | 49.0 | 51.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Steady Results Amid Portfolio Transitions: General Mills, Inc. reported first-quarter fiscal 2026 results that were broadly consistent with internal expectations on organic net sales and slightly ahead of forecasts for adjusted operating profit and adjusted diluted earnings per share (EPS). The company generated net sales of USD 4.5 billion, representing a 7% year-over-year decline, primarily reflecting a 4-point headwind from the net impact of divestitures and acquisitions. On an organic basis, sales declined 3%, driven by lower price realization and unfavorable mix, particularly in the North America Retail segment. Despite these top-line pressures, management emphasized that ongoing investments in innovation, consumer value, and marketing are beginning to yield share gains across key categories.
Profitability Supported by Divestiture Gains: Operating profit for the quarter rose sharply to USD 1.7 billion, marking a 108% increase from the prior year, primarily driven by a USD 1.05 billion gain from the sale of the U.S. yogurt business. Adjusted operating profit, excluding one-time items, declined 18% in constant currency to USD 711 million, mainly due to lower gross profit dollars. Gross margin contracted 90 basis points to 33.9%, reflecting elevated input costs partially offset by favorable product mix following the yogurt divestitures. Adjusted gross margin also decreased by 120 basis points to 34.2%. The adjusted operating profit margin stood at 15.7%, down 210 basis points, signaling near-term margin pressures as the company executes its value-driven reinvestment strategy.
Segment-Wise Performance and Market Dynamics: The North America Retail segment experienced a 13% decline in net sales to USD 2.6 billion, impacted by reduced pound volume and the yogurt divestitures. However, the business retained or grew pound share in 8 of its top 10 categories, aided by price adjustments and improved competitiveness. The North America Pet segment delivered 6% net sales growth to USD 610 million, supported by the Whitebridge Pet Brands acquisition, though organic sales declined 5% due to shipment timing. The North America Foodservice segment posted a 4% decline in reported sales but saw 1% organic growth driven by strong performance in cereals and biscuits. The International segment performed robustly, with sales rising 6% (4% organically), led by strength in India, North Asia, and Europe, resulting in a near-tripling of operating profit to USD 66 million.
Earnings Growth Boosted by Share Repurchases and One-Time Gains: Net earnings attributable to General Mills rose 108% to USD 1.2 billion, while diluted EPS more than doubled, increasing 116% to USD 2.22. This surge was mainly due to the divestiture gain, reduced share count, and disciplined cost management. Adjusted diluted EPS, however, declined 20% in constant currency to USD 0.86, impacted by lower operating profit and a higher adjusted effective tax rate of 24.1% versus 21.9% in the prior year. The company also returned significant capital to shareholders, repurchasing USD 500 million in shares and paying USD 331 million in dividends during the quarter, reinforcing its commitment to shareholder value creation.
Cash Flow and Balance Sheet Highlights: Operating cash flow for the quarter was USD 397 million, compared to USD 624 million in the prior year, reflecting lower earnings and unfavorable working capital movements following divestitures. Capital expenditures were reduced to USD 110 million from USD 140 million, indicating disciplined investment management. Despite lower cash generation, General Mills maintained a strong balance sheet and continued to enhance shareholder returns through dividends and buybacks. Average diluted shares outstanding declined 4% to 542 million, further supporting EPS accretion.
Strategic Outlook and Fiscal 2026 Priorities: For fiscal 2026, General Mills reaffirmed its strategic focus on restoring volume-driven organic sales growth by enhancing consumer value, product innovation, and marketing effectiveness under its Remarkable Experience Framework. The company anticipates near-term earnings pressure as it invests in initiatives such as the Blue Buffalo fresh pet food launch and expanded advertising efforts. For the full year, General Mills expects organic net sales to range between -1% and +1%, with adjusted operating profit and adjusted diluted EPS declining 10–15% in constant currency. Free cash flow conversion is projected to remain strong at or above 95% of adjusted after-tax earnings. Management remains confident that these reinvestments will position the company for sustainable and profitable growth in the long term.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on General Mills, Inc. (NYSE: GIS) at the current market price of USD 46.85, as on Oct 30, 2025 at 8:05 am PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Defensive Industry: Packaged Foods
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| GIS General Mills Inc |
0.90 1.97% | 46.52 | 16.27 | 14.88 | 1.91 | 3.76 | 2.48 | 11.55 |
| NSRGF Nestle SA |
-0.002 0.0021% | 97.36 | 26.86 | 18.76 | 3.13 | 7.10 | 3.81 | 21.70 |
| NSRGY Nestle SA ADR |
1.00 1.03% | 98.24 | 26.82 | 18.66 | 3.18 | 7.07 | 3.81 | 21.70 |
| KHC Kraft Heinz Co |
0.30 1.30% | 23.80 | 15.59 | 11.79 | 1.64 | 0.88 | 2.34 | 11.32 |
| DANOY Danone PK |
0.31 1.90% | 16.60 | 28.42 | 16.39 | 1.44 | 2.23 | 1.85 | 12.41 |
Data Powered by EOD Historical Data (“EODHD”).
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Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on October 30, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
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Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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