Goldman Sachs Downgrades General Mills (GIS) to Sell

January 11, 2013 8:10 AM EST Send to a Friend
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Price: $51.28 +0.12%

Rating Summary:
    2 Buy, 8 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 24 | New: 21
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Goldman Sachs downgraded General Mills (NYSE: GIS) from Neutral to Sell with a price target of $40.00 (from $42.00) saying they expect underperformance relative to our sector as EPS falls short of consensus on lower sales growth and reinvestment

"We believe GIS has a product cycle issue with a US retail portfolio that appears over-extended," the analyst said. "We believe either retailer- or manufacturer-led pruning is inevitable and likely to result in continued share losses. Data suggest that (1) this is under way in non-Greek yogurt and likely to impair its recovery in the yogurt category and (2) the cereal portfolio is at risk. We cut out-year estimates as a result but raise this year after the 2Q beat."

Cuts FY14 EPS from $2.89 to $2.84 and FY15 from $3.14 to $2.97.

For an analyst ratings summary and ratings history on General Mills click here. For more ratings news on General Mills click here.

Shares of General Mills closed at $41.60 yesterday.

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