GIS - Embedded Expectations Analysis - 2020 02 25
ï€ General Mills, Inc. (GIS:USA) currently trades near corporate averages relative to Uniform Earnings, with a 21.5x Uniform P/E. At these levels, markets have bullish expectations for the firm, but management may be concerned about growth, new product launches, and profitabilityï€ Specifically, management may lack confidence in their ability to sustain growth in retail yogurt and Go-GURT sales, across their Fiber One, Haagen-Dazs, and Chewy product lines, and in their Europe, Australia, Asia, and LatAm segments. Moreover, they may be concerned about the sustainability of favorable manufacturing leverage, the quality of their data investments, and the potential of their second line of Oui products. Furthermore, management may be exaggerating their innovation capabilities and the progress of new product launches. Also, they may lack confidence in their ability to improve operating profits while focusing on growth, and they may be downplaying concerns about SG&A costs. Finally, management may be concerned about FDA regulations and poor performance for GoodBelly and YQ.
General Mills manufactures and markets branded consumer foods. The company's segments are: North America Retail, which provides cereals, refrigerated yogurt, soup, meal kits, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and organic products, among others; Convenience Stores and Foodservice, which provides snacks, yogurt, frozen meals and frozen dough products, and baking mixes, among others; Europe and Australia, which includes retail and foodservice businesses in the Europe and Australia region; Asia and Latin America, which consists of retail and foodservice businesses in the Asia and South America regions; and Pets, which includes pet food products.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.