General Mills (GIS): Reassessing Valuation After Sluggish Sales and Rising Competition

General Mills (GIS) just declared another quarterly dividend at $0.61 per share, payable early next year. This comes as the company faces slower sales and increased competition, especially in its North America Retail division.

See our latest analysis for General Mills.

While General Mills has kept its dividend streak alive and rolled out new cereals like its Kernza line, the stock has struggled for momentum. The year-to-date share price return is -23.94% and the one-year total shareholder return is -22.87%. Markets seem wary of the company's ability to spark a turnaround as growth and margin headwinds persist.

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With shares trading well below analysts' price targets after persistent declines, the key question is whether General Mills is an undervalued defensive play right now or if the stock's outlook for muted growth is already priced in.

Most Popular Narrative: 10.3% Undervalued

General Mills is trading below the most widely followed fair value estimate, with the narrative seeing room for upside from its recent closing price of $48.33.

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.

Curious what bold financial bets underlie this valuation? The narrative leans on a radically different earnings outlook, with future profitability hinging on just a couple of aggressive assumptions. Wondering which figures do the heavy lifting for this fair value? Take a closer look. Some expectations may surprise you.

Result: Fair Value of $53.89 (UNDERVALUED)

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

However, renewed brand momentum or successful product launches could boost revenue and margins sooner than forecast and challenge the case for a prolonged earnings slowdown.

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

Build Your Own General Mills Narrative

If you see things differently or would rather draw your own conclusions, you can dig into the numbers and craft your own take in just a few 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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