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Chart analysis - General Mills 🥞

General Mills is a US food manufacturer that is (more or less) well known in Germany and Austria for its Nature Valley muesli bars and still has a lot of growth potential.

The company has been on a downward trend since mid-2023 and has already lost over 40 % of its share price.

The slide could continue down to around USD 45, which corresponds to a further downside potential of around 15 %. A level that could possibly be reached in the first half of 2026, provided there is no trend reversal before then.

Looking at past cycles, a subsequent price increase of up to 150 % to around USD 113 in the following years seems realistic to me.

It could also become interesting again in the short term, as quarterly figures will be announced on June 25 and these are expected to be positive again.

I am not invested, but find this quality company interesting in the long term.

3 Comments

Matzke@Matzke

I also think it's fairly valued, it's been on my watch list for a while now

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Christian@Investor-College

18H

You know the criteria I apply to dividend stocks by now:

1. payout ratio (POR) --> <75% (über drei Jahre hinweg; 1 Punkt)
2. Verschuldungsgrad --> <200% (über drei Jahre hinweg; 1 Punkt)
3. Dividendenwachstumsrate (Dividend Growth Rate DGR) -->>10% ideally over 3,5,10 years (up to 3 points)
4. return on sales --> >5% (over 3 years; 1 point)
5. equity ratio --> >=30% (over 3 years; 1 point)
6. return on equity (RoE) --> >=15% (over 3 years; 1 point)
7. price-cash-flow-ratio (P/FCF) --> <20 (1 Punkt)
8. Free Cash Flow Marge (Free Cashflow Margin;FCM) -->between 5% and 30% (over 3 years; 1 point))
9. Annual earnings growth (earnings growth) --> 8%-12% (over 5 years; 1 point)
Makes a maximum of 12 points in total.
$GIS brings it to 8 out of 12 possible points.
I usually add the total return (price gain + dividend), which should be >10% over 1, 3, 5 and 10 years (maximum 4 points).
This makes a maximum total of 16 points.
That puts $GIS at 9 points. You show the downturn over the last few years nicely.

Alternatives that I personally prefer from the Consumer Staples sector:
$MDLZ with 13 out of 16 points
$HSY with 14 out of 16 points
$CCEP with a proud 16 out of 16 points
There are also a few other candidates that I can post if required.

However, if you get into General Mills now, you can indeed hope for a decent price increase. But that's not my investment strategy.

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Christian@Investor-College

13H

BTW: I don't expect the share price to rise substantially in the next two to three years, with profit growth of 2% per year on the cards.
Reluctance to buy branded products, rising energy prices are reducing margins and the sugar issue is doing the rest.
Of course, this also applies to the alternative stocks mentioned.

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