General Mills initiated with an Equal Weight at Wells Fargo

Wells Fargo analyst Chris Carey initiated coverage of General Mills with an Equal Weight rating. The company has done well to transform its portfolio and execution has been sound, the analyst notes. While pricing tailwinds carry well into 2023, and Carey doesn’t have a negative view on EPS versus Street, the analyst believes the stock is at peak valuation, his work suggests that General Mills’ long-term EPS algorithm hasn’t changed much, and he expects estimate hikes to slow. With limited upside on the multiple or EPS, the stock likely takes a breather before the next leg up, Carey argues.