NEW YORK (TheStreet) -- Shares of General Mills Inc. (GIS) closed down -3.61% to $51.76 today on very heavy trading volume after the consumer foods company said it would lower costs after its promotional move in its fiscal fourth quarter resulted in poor results.
The company has relied on international growth as sales in the U.S. and other established markets have continued to negatively impact results, the Wall Street Journal reported.
TheStreet Ratings team rates GENERAL MILLS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL MILLS INC (GIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity, expanding profit margins, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GENERAL MILLS INC has improved earnings per share by 6.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GENERAL MILLS INC increased its bottom line by earning $2.79 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.79).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Food Products industry and the overall market, GENERAL MILLS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 37.86% is the gross profit margin for GENERAL MILLS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.37% is above that of the industry average.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GIS, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: GIS Ratings Report