GIS - Embedded Expectations Analysis - 2021 07 28
General Mills, Inc. (GIS:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 21.7x Uniform P/E. At these levels, the market is pricing in expectations for profitability to contract, but management may be concerned about the volatility of pricing, sustainability of demand, and launches of new plant-based products.Specifically, management may have concerns about the centralization of their corporate functions, the performance of less popular categories post-pandemic, and the potential
of their Yoplait plant-based product launch. Furthermore, they may lack confidence in
their ability to further develop the plant-based segment of their yogurt business, leverage first-party data insights across digital channels, and enhance their data and analytics capabilities. Finally, management may be concerned about the sustainability of demand and volatility around pricing, and they may be exaggerating the strength of their relationship with retail clients.
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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