Deutsche Bank has reaffirmed its Hold rating on General Mills, Inc. (GIS), citing cautious optimism around the company's ongoing product portfolio adjustments and moderate revenue growth. The firm notes that GIS’s recent performance reflects resilience in core brands despite macroeconomic headwinds.
- General Mills reported Q4 fiscal 2025 revenue of $4.8 billion, up 2.3% YoY.
- Adjusted EPS for Q4 was $1.15, slightly below the prior-year $1.17.
- Operating income declined 1.8% despite a 7.2% rise in operating cash flow.
- Company allocated $375 million to share repurchases in Q4.
- GIS stock trades at a P/E ratio of 25.4x, above the sector average of 21.8x.
- Hold rating maintained due to limited near-term growth catalysts.
General Mills, Inc. (GIS) continues to be evaluated as a stable but unspectacular performer in the consumer staples sector, according to Deutsche Bank, which has maintained its Hold rating on the stock. The bank’s assessment comes after the company reported fourth-quarter fiscal 2025 revenue of $4.8 billion, up 2.3% year-over-year, driven primarily by volume gains in its branded cereals and snacks divisions. Adjusted earnings per share for the period reached $1.15, in line with expectations but below the prior-year figure of $1.17. The bank points to a 1.8% decline in operating income for the quarter, signaling margin pressure from supply chain costs and inflationary input pricing. Despite this, General Mills has managed to sustain a 7.2% increase in operating cash flow year-over-year, a key indicator of underlying operational health. The company has also continued its share repurchase program, allocating $375 million in the last fiscal quarter to return capital to shareholders. Market reaction to the hold rating has been muted, with GIS stock trading within a narrow range over the past week. Analysts note that the current price-to-earnings ratio of 25.4x remains elevated relative to the sector average of 21.8x, suggesting limited upside potential in the near term. Investors are closely watching the company’s ability to scale margins and expand market share in emerging categories such as plant-based foods and direct-to-consumer channels. Deutsche Bank’s stance reflects a broader sentiment among equity analysts that GIS offers defensive exposure but limited growth catalysts in the current environment. The rating remains unchanged as the bank awaits clearer signals from the company’s capital allocation strategy and innovation pipeline before considering a rating upgrade.