General Mills Stock Analysis
Money and Finance

General Mills Stock Analysis


It's about time for another stock analysis. This time I decided to take a look atGeneral Mills (GIS). General Mills closed on Wednesday 5/9/12 at $38.91.

Company Background:

General Mills, Inc. manufactures and markets branded consumer foods worldwide. It also supplies branded and unbranded food products to the foodservice and commercial baking industries. The company offers ready-to-eat cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and frozen vegetables, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks; and a range of organic products, including soup, granola bars, and cereals; and ice cream and frozen desserts, and grain snacks. It sells its products through its direct sales personnel, as well as through broker and distribution arrangements to grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, commercial and noncommercial foodservice distributors and operators, restaurants, and convenience stores.

DCF Valuation:

Analysts expect General Mills to grow earnings 7.15% per year for the next five years and I've assumed they can continue to grow at 3.00% per year thereafter. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $43.43. This means that at $38.91 the shares are undervalued by 10%.

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