By Peet Serfontein & Khumbulani Kunene
General Mills is one of the leading global manufacturers and marketers of branded consumer foods with more than 100 brands (including Cheerios, Betty Crocker, and Häagen-Dazs) in 100 countries. It offers a variety of food products aimed at providing great flavours, nutrition, convenience, and value for consumers around the world.
The company is focused on executing its Accelerate strategy to drive sustainable, profitable growth and top-tier shareholder returns over the long term. The strategy focuses on four pillars (boldly building brands, relentlessly innovating, unleashing their scale, and being a force for good) to create strong competitive advantages. The company is prioritising its core markets, global platforms, and local gem brands that have the best prospects for profitable growth. General Mills is also committed to reshaping its portfolio with strategic acquisitions and divestitures to further enhance its growth profile.
Technically, the stock remains above major support signalling strong buying interest and investor confidence at this price level.
The stock's ability to stay above major support even during broader market declines recently indicates resilience and suggests that sellers are unwilling to pull the price lower, further amplifying a bullish tone and attracting more buyers, potentially leading to upward momentum as confidence grows in the stock's stability and potential for future growth.
According to the Moving Average Convergence Divergence (MACD) histogram, the start of the upside price momentum supports the bullish trend. Equally so, the upward trajectory of the On-balance volume (OBV) also supports the bullish trend.
A recent set of green candles on the Heikin-Ashi chart, which typically indicates that the stock's price has been consistently rising, further supports the bullish bias.
Share Information
| Share Code | GIS |
|---|---|
| Industry | Food, Beverage & Tobacco |
| Market Capital (USD) | 38.52 billion |
| One Year Total Return | -0.70% |
| Return Year-to-Date | 9.14% |
| Current Price (USD) | 69.20 |
| 52 Week High (USD) | 774.45 |
| 52 Week Low (USD) | 60.33 |
| Financial Year End | May |
| The stock remains above its 200-day simple moving average, which is considered to be bullish, and suggests that the upward bias is strong. |
Consensus expectations
(Bloomberg)
| FY24 | FY25E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 4.52 | 4.50 | 4.73 | 4.99 |
| Growth (%) | -0.38 | 5.00 | 5.44 | |
| Dividend Per Share (USD) | 2.36 | >2.43 | 2.53 | 2.65 |
| Growth (%) | 2.80 | 4.33 | 4.74 | |
| Forward PE (times) | 215.37 | 14.64 | 13.88 | |
| Forward Dividend Yield (%) | 3.51 | 3.66 | 3.83 | |
| Despite some short-term headwinds, growth prospects remain attractive over the medium term, with stable growth expected thereafter. | ||||
Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | HSY US - BUY (Continue to hold) | KDP US - BUY (Continue to hold) | BALL US - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 192.67 | 34.12 | 61.71 |
| Current | 199.46 | 35.15 | 62.58 |
| Movement | +3.5% | +3.0% | +1.4% |
|
The price remains above key long-term support. Remains above its 200-day simple moving average. Upside momentum supports the trade.
Our profit target is $215 with a trailing stop-loss at $190.70. Exit the trade by 1 November 2024. |
The price is exhibiting a consistent uptrend. Remains above its 200-day simple moving average. Upside momentum supports the trade.
Our profit target is $37 with a trailing stop-loss at $33.90. Exit the trade by 16 October 2024. |
The price is developing a broadening bottom pattern. Remains above its 200-day simple moving average. Downside momentum supports the trade. Our profit target is $69.00 with a trailing stop-loss at $59.60. Exit the trade by 7 February 2025. |
| Share Name and position | LYB US - BUY (Continue to hold) | ADSK US - BUY (Continue to hold) | SYY US - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 95.48 | 243.51 | 75.19 |
| Current | 96.63 | 244.61 | 75.37 |
| Movement | +1.2% | +0.5% | +0.2% |
| A price at the upper range of a price distribution remains of interest. Testing its 200-day simple moving average. Downside momentum supports the trade. Our profit target is $105.00 with a trailing stop-loss at $92.50 Exit the trade by 2 October 2024. | A price that is building a price base remains of interest. Crossed above its 200-day simple moving average. Upside momentum supports the trade. Our profit target is $283.00 with a trailing stop-loss at $228.81. Exit the trade by 23 August 2024. | A symmetrical triangle pattern remains of interest. Testing its 200-day simple moving average. Upside momentum supports the trade. Our profit target is $84.00 with a trailing stop-loss at $72.00. Exit the trade by 6 November 2024. |
FNB Stockbroking and Portfolio Management (Pty) Ltd, a subsidiary of FirstRand Bank Limited, an authorised Financial Services Provider and authorised user of the JSE limited (Reg no: 1996/011732/07). This Publication note is issued by FNB Stockbroking and Portfolio Management (Pty) Ltd for the information of clients only and should not be produced in whole or part without prior permission. Although FNB Stockbroking and Portfolio Management (Pty) Ltd is an Authorised Financial Services Provider, any opinions and/or analysis contained in this Publication are for informational purposes only and should not be considered advice, including but not limited to financial, legal or tax advice, or a recommendation to invest in any security or to adopt any investment strategy. The information contained herein has been obtained from sources/persons which we believe to be reliable but is not guaranteed for correctness, completeness or otherwise and we do not assume liability for loss arising from errors in the information or that may be suffered from using or relying on the information contained herein irrespective of whether there has been any negligence by us, our affiliates or any other employees of us, and whether such losses be direct or consequential. As market and economic conditions are subject to rapid change, any comments, opinions, and analysis is rendered as of the date of publishing and may change without notice. Such changes may have a material impact on the outcome of any investment. Securities involve a degree of risk and are volatile instruments. Past performance is not indicative of future performances. Securities or financial instruments mentioned in the Publication note may not be suitable for all investors and FNB Stockbroking and Portfolio Management (Pty) Ltd has bares no responsibility whatsoever arising from or as a consequence hereof. The material is not intended as a complete analysis of every material fact regarding any share, instrument, sector, region, market, country, investment, or strategy. The recipient of this Publication must make their own investment decision and is advised to contact his relationship manager for a personal financial analysis prior to making any investment decisions. Copyright 2018 by FNB Stockbroking and Portfolio Management (Pty) Ltd.
