General Mills (GIS) has reported better-than-expected results for the first quarter of Fiscal Year 2022. The company manufactures and markets branded consumer foods, which it sells through retail stores.
Following the release, shares of the company climbed 3.2% in early trade on Wednesday.
Revenues climbed 4% year-over-year to $4.5 billion and surpassed analysts’ expectations of $4.25 billion. The upside can be attributed to the growth in revenues from pet and convenience stores & foodservice unit.
Adjusted EPS of $0.99 came ahead of the Street’s estimates of $0.88. The company had reported earnings of $1 per share in the same quarter last year. (See General Mills stock charts on TipRanks)
The Chairman and CEO of General Mills, Jeff Harmening, said, “We delivered these good results while continuing to advance our Accelerate strategy, including making important progress on portfolio reshaping in the quarter.”
Meanwhile, the company has reiterated its outlook for Fiscal Year 2022.
In a release, the company stated, “Organic net sales are expected to be toward the higher end of the company’s initial guidance range of down 1 to 3%, reflecting stronger-than-expected net sales performance in the first quarter.”
“Adjusted diluted EPS are each expected to be toward the higher end of the initial guidance ranges of down 2 to 4% and flat to down 2%, respectively, largely due to the impact of the pet treats acquisition, which is estimated to add approximately 2 cents to fiscal 2022 adjusted diluted EPS,” it added.
On September 13, Credit Suisse analyst Robert Moskow downgraded his rating on the stock to a Hold and also lowered the price target to $63 from $68. The new price target implies 8.6% upside potential from current levels.
Moskow is of the opinion that unexpected labor inflation and delays from suppliers may lead to another pricing lag and more margin compression in the back half of Fiscal Year 2022.
Based on 2 Buys, 4 Holds and 2 Sells, the stock has a Hold consensus rating. The average General Mills price target of $62.13 implies 7.1% upside potential from current levels.
Related News:
Salesforce Launches Health Cloud 2.0; Analysts Remain Bullish
Celestica Signs All-Cash Deal to Buy PCI Limited
JPMorgan Hikes Quarterly Dividend by 11.1%
