GIS - Embedded Expectations Analysis - 2020 04 23
General Mills, Inc. (GIS:USA) currently trades above recent averages relative to Uniform earnings, with a 23.2x Uniform P/E. At these levels, markets have bullish expectations for the firm, but management may be concerned about COVID-19, capex spend, and their retail partnershipsSpecifically, management may have concerns about lower capex spending in FY2020, reduced away-from-home food demand in Asia and Latin America, and the continued closure of restaurants and businesses globally. Furthermore, they may lack confidence in their ability to accurately give guidance amidst the COVID-19 pandemic and sustain operational cash flow growth. Finally, management may be concerned about operating profit declines in Asia and Latin America, and they may be exaggerating the strength of their partnership with retailers, the sustainability of Gushers and Disney Fruit Snacks performance, and their ability to continue normal productio
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.
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