General Mills Stock Falls As Citi Places It On ‘Negative Catalyst Watch’: Retail Sentiment Sours
Sentiment on Stocktwits ended Friday in the ‘bearish' zone compared to neutral a week ago.
Shares of General Mills Inc. (GIS) have dived 8.85% in the past five days following a price target cut ahead of the consumer products giant’s fiscal third-quarter earnings, dragging down retail sentiment.
Wall Street expects the company to post earnings per share of $0.97 on revenue of $4.96 billion. General Mills has beaten EPS estimates all four times in the past four quarters and revenue thrice in the same period.
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In the second quarter, General Mills posted net sales of $5.2 billion, up 2% year-over-year, while organic net sales rose 1%.
On Friday, Citi analyst Thomas Palmer lowered the firm's price target to $58 from $60 with a ‘neutral’ rating on the shares, The Fly reported.
Citi put the company on a "90-day negative catalyst watch" as it saw downside risks to both sales and earnings estimates. Citi cited that shipment timing could weigh on the company’s forthcoming results in addition to challenges in its takeaway trends, especially snack bars and cereal.
According to the report, General Mills' investments to boost sales growth could put pressure on pricing and margins with “limited benefit to volume.”
Last month, Jefferies reportedly raised its price target to $62 from $58 with a ‘Hold’ rating following an update from the management on its inventory and consumption trends that indicated ”a possible guidance cut" when the company reports Q3 results. The brokerage’s own data also projected the company’s channel retail sales trends worsening sequentially from Q2, said the report.
Sentiment on Stocktwits ended Friday in the ‘bearish' zone compared to neutral a week ago. Message volume was in the ‘low’ zone compared to 'normal' in the same period.
However, one bullish watcher called food stocks defensive.
General Mills’ stock is down 6.6% year-to-date.
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