Yahoo Finance Goldman Sachs Downgrades General Mills to ‘Sell’
Tuesday's Consumer Pops and Drops: GIS, SNE, ENR, and HLF
Price movement of General Mills
General Mills (GIS) has a market cap of $37.4 billion. It fell by 0.48% to close at $62.40 per share on May 24, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.94%, 2.1%, and 9.9%, respectively.
This means that GIS was trading 0.32% below its 20-day moving average, 0.18% above its 50-day moving average, and 7.8% above its 200-day moving average.
Related ETF and peers
The PowerShares High Yield Equity Dividend Achievers Portfolio ETF (PEY) invests 1.6% of its holdings in General Mills. The ETF aims to track a yield-weighted index of US companies that have increased their annual dividend for at least ten consecutive years. The YTD price movement of PEY was 12.2% as of May 24, 2016.
The market caps of General Mills’s competitors are as follows:
Kellogg Company (K) — $26.5 billion
Hershey (HSY) — $19.5 billion
Post Holdings (POST) — $4.8 billion
Goldman Sachs downgraded General Mills
Goldman Sachs has downgraded General Mills’s (GIS) rating to “sell” from “neutral.” It set the price target at $58.00 per share.
General Mills is investing in new food companies and establishing itself in venture capital. Its investment in Kite Hill, which makes cheese and yogurt from nuts, is a part of $18 million.
Performance of General Mills in fiscal 3Q16
General Mills (GIS) reported fiscal 3Q16 net sales of ~$4.0 billion, a fall of 8.0% compared to net sales of $4.4 billion in fiscal 3Q15. Sales from the US Retail, International, and Convenience Stores and Foodservice segments fell by 6.6%, 13.1%, and 2.4%, respectively, in fiscal 3Q16 compared to fiscal 3Q15.
The company’s cost of sales as a percentage of net sales fell by 3.4%, and its operating profit rose by 9.1% in fiscal 3Q16 compared to fiscal 3Q15. It reported the gain on divestitures of $1.5 million in fiscal 3Q16.
Its net income and EPS (earnings per share) rose to $361.7 million and $0.59, respectively, in fiscal 3Q16, compared to $343.2 million and $0.56, respectively, in fiscal 3Q15.
General Mills’s cash and cash equivalents and inventories fell by 0.19% and 14.8%, respectively, in fiscal 3Q16 compared to fiscal 3Q15. Its current ratio and debt-to-equity ratio rose to 0.76x and 3.0x, respectively, in fiscal 3Q16 compared to 0.67x and 2.9x, respectively, in fiscal 3Q15.
In the next part, we’ll look at Hormel Foods (HRL).
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