General Mills (GIS) caught the market’s attention this week when it reaffirmed its earnings guidance for fiscal year 2026. In the latest update, the company expects organic net sales to come in between down 1% and up 1% versus the previous year, and flagged that factors like divestitures, acquisitions, currency swings, and the timing quirk of a 53rd week will reduce full-year net sales growth by about 4%. For investors weighing their next move, these signals around future growth and how management is framing their outlook make now a timely moment to revisit what’s priced into the stock.
The reaffirmed guidance comes after a year in which General Mills shares have drifted lower, slipping nearly 30% over the past twelve months. Shorter-term momentum has stayed muted, even as the company announced the latest high-profile Wheaties box partnership and continued efforts to streamline and refocus its portfolio. The combination of modest revenue decline and earnings caution sets up a crossroads for both risk tolerance and return expectations in the current market environment.
So, with the stock trading near its lows and fresh guidance on the table, is General Mills offering a value opportunity, or is the market already baking in all the growth (or lack thereof) still to come?
The prevailing view among analysts is that General Mills is undervalued, with a calculated fair value around 9% higher than today’s share price. This valuation reflects cautious optimism despite negative earnings momentum and margin pressures in the near term.
General Mills’ strategy of fewer, but bigger innovations in fiscal ’26 involves focusing on a smaller number of larger innovations. While this may benefit future revenue growth, the time required to develop and execute such innovations means immediate impacts on earnings might be limited.
What is the secret ingredient behind this undervaluation call? The narrative is hinting at an earnings and margin trajectory shaped by bold strategic reinvestments, with expectations for a turnaround that hinges on the scale of several key corporate moves. Want to discover what bold assumptions underpin the consensus price target? Unpack the full narrative for the projections behind this fair value.
Result: Fair Value of $54.80 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, stronger-than-expected gains from brand innovation or a successful turnaround in snacks and cereals could quickly shift the earnings outlook from cautious to optimistic.
Find out about the key risks to this General Mills narrative.
Taking a different approach, our SWS DCF model suggests General Mills may be even further undervalued than the consensus price target implies. This method factors in anticipated cash flows, not just earnings multiples. However, which narrative more accurately captures what’s ahead for General Mills?
Look into how the SWS DCF model arrives at its fair value.
GIS Discounted Cash Flow as at Sep 2025
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out General Mills for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
If your outlook differs from the consensus or you prefer to dive into the data yourself, you can quickly craft your own narrative insight in just minutes. Do it your way
A great starting point for your General Mills research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include GIS.
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