UBS Remains Sidelined on General Mills (GIS) Following 1Q Report
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UBS reiterated a Neutral rating on General Mills (NYSE: GIS), and cut the price target to $67.00 (from $71.00), following the company's 1Q earnings report. GIS reported EPS of $0.78 beating Consensus by $0.03.
Analyst Steven Strycula commented, "GIS reported F1Q (May-end) EPS of $0.78 beating Consensus by $0.03. F1Q EPS upside was driven by op. margin expansion of +73bp (vs UBS -10bps), though -4% YOY organic sales trends disappointed (with US retail -5%, International -1%, CS&F -7%). Weaker organic sales were attributable to ongoing US yogurt declines (-15% YOY), steep US Soup sale decreases (-20% YOY, due to SKU ration + lower retail inventory levels), and commodity flour price deflation. Despite these revenue headwinds, GIS said organic sales trends should improve sequentially in coming qtrs as Mills laps easier YOY comps at Wal-Mart, implements revenue management, and reinvests in Yogurt. GIS also reiterated their FY17 guidance including: 1) organic net sales -2% to flat; 2) adj EPS ex fx of +6-8% (-2pp from FX)."
Shares of General Mills closed at $65.26 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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