Tuesday was investor day at $GIS (-1,44%) with a bag full of information. If you want to browse through the 180 slides (also a wild ride through the product portfolio) you can find them on the homepage in the investor section.
In order to save a little time analyzing the presentation and the currently available $GIS (-1,44%) I got support from ChatGPT (point 3 - I'm not posting the whole calculation here, but it is quite conclusive and comprehensible). Let's see what the AI thinks, whether the current price is fundamentally justified or whether the market is exaggerating.
Does anyone else use AI for analysis or other financial decisions? What are your experiences with it?
Here we go ....
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1. company situation and strategy
General Mills is one of the largest food companies in the world. The "Accelerate Strategy" aims for 2-3 % organic growth, stable margins and over 95 % free cash flow conversion.
The focus is on
- the pet food business (Blue Buffalo, Tiki Cat),
- Premiumization in Snacks & Meals,
- efficiency through the Holistic Margin Management (HMM) program (savings ≈ 5% of COGS p.a.),
- and clear capital discipline with a focus on dividend growth and selective M&A.
The dividend has risen from USD 1.96 to USD 2.40 since 2019, and the trend remains positive.
2. current situation
The share price has fallen significantly since 2024. This is due to short-term declines in earnings (-10 to -15 % in FY26 due to portfolio adjustments) and a general slump in consumption.
Nevertheless, operations are solid: margins slightly higher, cash flow stable, cost efficiency high. The Pet segment continues to grow strongly, Ice Cream (Häagen-Dazs) and Mexican Food (Old El Paso) are showing good momentum worldwide.
3rd valuation - DCF analysis
ChatGPT has created a DCF model based on the company's targets:
- Discount rate (WACC): 7.5%
- Long-term growth: 2.5%
- Free cash flow 2025: USD 2.5 billion
The calculated fair value is around USD 67-68 per share. At a share price of USD 47, this results in a discount of around 30 % (margin of safety). Even with conservative assumptions (8.5 % WACC, 2 % growth), the fair value would still be ~ USD 50 - still slightly above the current level.
4. assessment and approach
Strong brand portfolio, reliable cash flow, 5% dividend yield, stable balance sheet. Unpopular in the short term, attractive in the long term - sounds like a classic value case at this level. At prices below USD 50, the savings plan could be reactivated to increase the position.
