General Mills Has Room For Further Guidance Boost, Says Credit Suisse

  • Credit Suisse analyst Robert Moskow reiterated a Neutral rating on the shares of General Mills Inc GIS and raised the price target to $77 from $74.
  • Contrary to the expectations, Q1 FY23 gross margin turned expansionary in the quarter, owing to strong elasticity and less bad operating deleverage.
  • The company did not raise its inflation outlook by a material amount, noted Moskow.
  • RelatedGeneral Mills Boosts FY23 Outlook Post Q1 Results
  • The analyst thinks General Mills' performance was better than its peers, including, Kraft Heinz Co KHCHormel Foods Corp HRL, and McCormick & Company Inc MKC, which recently warned about higher costs in Q3.
  • Also ReadMcCormick Shares Drop After Gloomy Outlook
  • In addition to the outlook boost, the company has a lot of flexibility to ramp up its profit guidance again, if merited, noted Moskow.
  • Sales growth deceleration from consumer mobility and elasticity of demand from higher pricing represents the main risk to the target price, said the analyst.
  • Price Action: GIS shares are trading higher by 1.43% at $80.86 on the last check Thursday.
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