General Mills, Inc. (GIS)

[winston]

not vested

This Safe Dividend Growth Stock is Down 15%-Plus Since July

By Brian Bollinger

The company’s largest brands are Cheerios, Betty Crocker, Yoplait, Pillsbury, Nature Valley, Old El Paso, and Haagen-Dazs.

Each of these brands generates over $1 billion in annual sales.

Source: Simply Safe Dividends

http://dailytradealert.com/2017/03/16/t ... ince-july/

[winston]

not vested

Like Kellogg, General Mills, Inc. (NYSE:GIS) has declined to test its July lows after threatening a break above its 200-day moving average in the middle of August.

Shares have benefited from some off-and-on M&A takeover speculation, but nothing concrete has come out.

Back in June, analysts at Stifel cut their price target on management comments about soft profitability, the need for reinvestment in the business, and general headwinds in the North American market.

The company will next report results on Sept. 20 before the bell. Analysts are looking for earnings of 77 cents per share on revenues of $3.79 billion.

When the company last reported on June 28, earnings of 73 cents beat estimates by 2 cents per share despite a 3.1% revenue decline.

Source: Investor Place

[winston]

not vested

General Mills -6% after guiding 2018 earnings below consensus

General Mills (NYSE:GIS) -6.3% premarket despite narrowly beatings expectations for FQ3 earnings and revenues after cutting its full year earnings forecast, citing a sharp increase in freight and commodity costs.

GIS forecasts FY 2018 EPS of $3.08, below the $3.17 analyst consensus estimate, coming in flat to 1% growth compared to its previous guidance of a 3%-4% increase.

For FQ3, GIS says adjusted operating profit margin decreased 120 bps to 15.7%, primarily reflecting lower adjusted gross margin.

Net income more than doubled to $941.4M in the quarter, helped by a one-time $504M tax benefit from the recent changes in the U.S. tax code.

“Like the broader industry, we’re seeing sharp increases in input costs, including inflation in freight and commodities,” the company says.

"We are moving urgently to address this increasingly dynamic cost inflation environment."

Source: Seeking Alpha

https://www.investing.com/news/stock-ma ... us-1352125

[winston]

not vested

General Mills: Testing My Convictions


Summary

To investors' dismay, a fresh new problem for General Mills to tackle has been introduced: rising production costs.

Otherwise, all seems to be going well for the packaged foods giant, including long-awaited sales resilience and rich cash flow generation.

If I had to hold a solid consumer staples name in my diversified portfolio, I continue to think that GIS would be a top candidate on my list.

Source: Seeking Alpha

https://seekingalpha.com/article/415802 ... ngcom_feed

[winston]

not vested

Cheerios, Häagen-Dazs Maker to Raise Prices, Sheding $2.5 Billion in Market Value

By LUCINDA SHEN

Consumers might just start saying “no” to Honey Nut Cheerios.

That comes as General Mills, which also produces Yoplait yogurt, Gushers, and Häagen-Dazs ice cream, said it would raise the prices of some packaged goods Wednesday, due to rising shipping and commodities costs.

“In terms of pricing, we are going to use a number of levers in some markets and some businesses; it’s going to be list price increase,” said Donald Mulligan, the firm’s Chief Financial Officer, also pointing to greater inflation in the U.S. economy.

That news, alongside a lowered full-year forecast, cut the 151-year-old food giant’s market value by $2.5 billion, to about $25.8 billion. Shares feel about 9% in trading—its single worst slide in almost a decade.

That came as General Mills said during its fiscal third quarter earnings that it expected earnings of $3.08 to $3.11 per share for the year—a significant difference the previously forecasted $3.17.

Higher shipping prices are ringing throughout the industry. During the firm’s earnings call, CEO Jeff Harmening, noted that freight costs now represent about 20% of shipments, against a historical 5%.

“In fact North American freight spot prices were near 20-year highs in February,” he said.

Source: Fortune

http://fortune.com/2018/03/21/cheerios- ... ket-value/

[winston]

General Mills Is Currently Between A Rock And A Hard Place

by Justin Pope

Summary

General Mills was slaughtered during Q3 earnings, to the tune of almost -9%. This easily pushed shares to fresh 52 weeks lows.

Despite shares being priced at such low prices, I don't see General Mills as a buy right now.

We review a combination of factors between inflation and the pending Blue Buffalo acquisition that should give investors pause before playing in this name.

About a month ago, a deal was announced in which General Mills had reached an agreement to acquire premium pet food company Blue Buffalo (BUFF). The deal is now pending, and will be for $8B.

The motivation for General Mills to get this done (at a hefty price of 41X forward earnings) was to solve its problem of lacking top-line growth - a challenge currently hurting various packaged food companies.

The deal would add a nice bump to revenues, as Blue Buffalo is expecting $1.4B in revenues in 2018.

Share buybacks are being halted, and the dividend is being maintained (a backhanded way of saying that incoming dividend increases will be absolutely minimal).

Operating profit stumbled from 16.9%, down to 15.7%.

The Blue Buffalo deal has made General Mills fiscally vulnerable over the next couple of years, as the company has come right out and declared that 2020 will be when the deal is cash accretive to the bottom line.

At $45 per share, the stock is trading at just under 15X earnings. The dividend is yielding approximately 4.3%, which is way above its historical norms.

Source: Seeking Alpha

https://seekingalpha.com/article/415817 ... ngcom_feed

[winston]

not vested

General Mills looks compelling to Susquehanna

By: Clark Schultz

Susquehanna upgrades General Mills (NYSE:GIS) to a Positive rating on a call based largely on valuation.

"After the recent pullback, and factoring the Blue Buffalo deal in our estimates, GIS now trades at a compelling 8.3% FCF yield and pays a 4.4% dividend yield," writes analyst Pablo Zuanic.

Susquehanna lifts the price target on the food stock to $53 from $51.

Shares of General Mills are up 0.45% premarket to $44.65.

Source: Seeking Alpha

https://seekingalpha.com/news/3341229-g ... usquehanna

[winston]

not vested

Recent Purchase: General Mills

by Nicholas Ward

Summary
General Mills now yields more than 4.3% and is trading at a valuation not seen in years.

The missed guidance isn't great, but I think the ~10% sell-off was irrational and I was happy to take advantage at $45.11.

The Blue Buffalo deal will likely slow dividend growth in the near-term, but I think it improves the long-term growth prospects of this mature, consumer staples name.

Source: Seeking Alpha

https://seekingalpha.com/article/415835 ... ngcom_feed

[winston]

Is General Mills A Bargain At A 4-Year Low?

Summary

Since it peaked almost two years ago, General Mills has lost 30% whereas S&P has rallied 28%.

The causes of the plunge are the rising interest rates and the recently announced major acquisition of Blue Buffalo.

The dividend yield of General Mills has risen to 4.3% for the first time in more than a decade.

They should realize that it is the first time in more than a decade that they can purchase General Mills at a 3.9% dividend yield.

As this yield is not likely to increase much further, the stock seems to have limited downside but meaningful upside right now.

Source: Seeking Alpha

https://seekingalpha.com/article/415831 ... ngcom_feed

[winston]

General Mills prices $1B equity offering at $44/share

By Jason Aycock

General Mills (NYSE:GIS) has priced its public equity offering tied to its acquisition of Blue Buffalo Pet Products at $44/share.

The company's offering 22,727,273 shares of common stock, with a 30-day greenshoe option to buy up to an additional 2,272,727 shares at the offering price.

Net proceeds for the Blue Buffalo acquisition are expected at $970M.

Joint book-runners are Goldman Sachs and BofA Merrill Lynch. The offering's expected to close on Monday.

Shares closed today at $45.31; they're down 1.1% after hours to $44.81.

Source: Investing.com