General Mills (GIS): Assessing Value as Investors Brace for Profit Decline Ahead of Q2 Earnings

General Mills (GIS) is in focus this week as anticipation builds around its upcoming fiscal second-quarter earnings report. Investors are keyed in, with projections pointing to a meaningful profit decline compared to last year.

See our latest analysis for General Mills.

The market’s been on edge as General Mills prepares to report lower profits, with expectations of margin pressure and sluggish growth clearly weighing on sentiment. The stock most recently closed at $46.57, capping off a tough stretch with a -26.7% year-to-date share price return and an even steeper -28.6% total shareholder return over the past year. This suggests momentum continues to fade despite brand activity and nostalgic marketing efforts.

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With shares trading at a steep discount to analyst targets after a difficult year, the key question is whether General Mills is now undervalued, or if ongoing challenges mean the market has already priced in any future rebound.

Most Popular Narrative: 13.6% Undervalued

General Mills’ narrative-based fair value is $53.89, above the recent close of $46.57. The numbers suggest analysts see room for a rebound on a multi-year horizon.

General Mills plans a sizable step-up in investment for fiscal '26, including at least 5% through Holistic Margin Management (HMM) savings and $100 million in additional cost savings. However, reinvestment of these savings into pricing, innovation, in-store activity, and media could delay improvements in net margins and overall earnings in the short term.

Read the complete narrative.

What assumptions are analysts boldly betting on to justify this higher value? Does the forecast hinge on shrinking earnings, shrinking revenue, or bigger future profits? The secret is in the growth math. Unpack the full model to see what tips this fair value calculation.

Result: Fair Value of $53.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a swift recovery in core brands or breakthrough new products could flip the script and challenge these more cautious assumptions.

Find out about the key risks to this General Mills narrative.

Build Your Own General Mills Narrative

If this perspective doesn’t match your own, or you’re interested in a different angle, you can easily build your own narrative in just minutes. Do it your way

A great starting point for your General Mills research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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