GIS
GIS
ACCUMULATE 2026-03-07
Model
DDM
Price at Report
$44.29
Base IV
$50.14
Bear IV
$40.21
Bull IV
$63.26
Entry Zone: 42-46 · Sell Above: 54
Bore Family Office
Valuation Report — General Mills (GIS) • March 7, 2026
3-Stage DDM (Ke) • Discount Rate: 7.60% • Current Price: $44.29
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
General Mills was founded in 1856 as a flour milling company in Minnesota. Today it is one of the world's largest food companies with ~$19.5B in revenue. The company operates through four segments: North America Retail (~60% of revenue) — iconic brands including Cheerios, Wheaties, Betty Crocker, Pillsbury, Old El Paso, Häagen-Dazs, Nature Valley, Yoplait; Pet Segment (~12%) — Blue Buffalo premium pet food, acquired for $8B in 2018; North America Foodservice (~12%); and International (~16%). Blue Buffalo has been a growth engine but faces increasing competition from Purina and private label. The core North American cereal and snack portfolio is mature with stable-to-declining volumes as consumers shift to fresher foods. Revenue peaked at $20.1B in FY2023 and has been declining as volume erosion offsets modest pricing. Management has responded with aggressive buybacks (3.6% yield), cost cuts, and portfolio optimization (divested Yoplait EMEA, sold European flour business). Net debt of $14.9B (FY2025) is elevated but supported by $3.8B EBITDA (3.9× leverage).📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $18,127 | $18,993 | $20,094 | $19,857 | $19,487 |
| EBITDA ($M) | $3,746 | $4,046 | $3,980 | $3,984 | $3,844 |
| Operating Income ($M) | $3,145 | $3,476 | $3,434 | $3,432 | $3,305 |
| Net Income ($M) | $2,340 | $2,707 | $2,594 | $2,497 | $2,295 |
| EPS (diluted) | $3.78 | $4.42 | $4.31 | $4.31 | $4.10 |
| Free Cash Flow ($M) | $2,452 | $2,747 | $2,089 | $2,529 | $2,293 |
| Annual DPS | $2.020 | $2.040 | $2.160 | $2.360 | $2.400 |
| Total Debt ($M) | $12,612 | $11,620 | $11,706 | $12,930 | $14,879 |
| Rev YoY Growth | — | +4.8% | +5.8% | -1.2% | -1.9% |
📈 DDM Scenarios
$40
🔴 Bear
$50
📊 Base
$63
🚀 Bull
$44.29
Current Price
$50
Analyst Avg PT
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.452 | $2.279 | $2.28 |
| Year 2 | Stage 1 | $2.464 | $2.129 | $4.41 |
| Year 3 | Stage 1 | $2.477 | $1.988 | $6.40 |
| Year 4 | Stage 1 | $2.489 | $1.857 | $8.25 |
| Year 5 | Stage 1 | $2.502 | $1.734 | $9.99 |
| Year 6 | Stage 2 | $2.527 | $1.628 | $11.62 |
| Year 7 | Stage 2 | $2.552 | $1.528 | $13.14 |
| Year 8 | Stage 2 | $2.577 | $1.434 | $14.58 |
| Year 9 | Stage 2 | $2.603 | $1.346 | $15.92 |
| Year 10 | Stage 2 | $2.629 | $1.264 | $17.19 |
| Terminal | — | TV=$47.89 | PV(TV)=$23.02 (57% of IV) |
Base Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.513 | $2.336 | $2.34 |
| Year 2 | Stage 1 | $2.589 | $2.236 | $4.57 |
| Year 3 | Stage 1 | $2.666 | $2.140 | $6.71 |
| Year 4 | Stage 1 | $2.746 | $2.049 | $8.76 |
| Year 5 | Stage 1 | $2.829 | $1.961 | $10.72 |
| Year 6 | Stage 2 | $2.899 | $1.868 | $12.59 |
| Year 7 | Stage 2 | $2.972 | $1.780 | $14.37 |
| Year 8 | Stage 2 | $3.046 | $1.695 | $16.06 |
| Year 9 | Stage 2 | $3.122 | $1.615 | $17.68 |
| Year 10 | Stage 2 | $3.200 | $1.538 | $19.22 |
| Terminal | — | TV=$64.32 | PV(TV)=$30.92 (62% of IV) |
Bull Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.574 | $2.392 | $2.39 |
| Year 2 | Stage 1 | $2.716 | $2.346 | $4.74 |
| Year 3 | Stage 1 | $2.865 | $2.300 | $7.04 |
| Year 4 | Stage 1 | $3.023 | $2.255 | $9.29 |
| Year 5 | Stage 1 | $3.189 | $2.211 | $11.50 |
| Year 6 | Stage 2 | $3.317 | $2.137 | $13.64 |
| Year 7 | Stage 2 | $3.449 | $2.066 | $15.71 |
| Year 8 | Stage 2 | $3.587 | $1.996 | $17.70 |
| Year 9 | Stage 2 | $3.731 | $1.930 | $19.63 |
| Year 10 | Stage 2 | $3.880 | $1.865 | $21.50 |
| Terminal | — | TV=$86.88 | PV(TV)=$41.76 (66% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.6% | $67 | $74 | $83 | $95 | $113 |
| 6.1% | $60 | $65 | $71 | $79 | $91 |
| 6.6% | $54 | $58 | $62 | $68 | $77 |
| 7.1% | $49 | $52 | $56 | $60 | $66 |
| 7.6% | $45 | $47 | $50 | $54 | $58 |
| 8.1% | $41 | $43 | $46 | $48 | $52 |
| 8.6% | $38 | $40 | $42 | $44 | $47 |
| 9.1% | $36 | $37 | $39 | $41 | $43 |
| 9.6% | $34 | $35 | $36 | $37 | $39 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Ticker | Company | P/E | EV/EBITDA | Div Yield | FCF Yield |
|---|---|---|---|---|---|
| GIS | General Mills (current) | 10.8x | 9.2x | 5.5% | 11.8% |
| CPB | Campbell Soup | 13.2x | 11.8x | 3.9% | 6.2% |
| CAG | Conagra Brands | 7.9x | 7.8x | 7.4% | 14.5% |
| HRL | Hormel Foods | 17.4x | 10.5x | 3.8% | 5.5% |
| SJM | J.M. Smucker | 10.5x | 8.9x | 4.1% | 7.8% |
| GIS | 5-yr avg (own history) | 17.0x | 12.0x | 3.2% | 8.0% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.440 |
| Current Yield | 5.51% |
| Consecutive Growth Years | 6 |
| 1-yr DPS CAGR | +1.7% |
| 3-yr DPS CAGR | +4.0% |
| 5-yr DPS CAGR | +3.7% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 59.5% |
| FCF Payout Ratio | 59.0% |
| Sustainability Verdict | Safe ✅ |
General Mills' dividend is well-covered from both an EPS (59% payout) and FCF (59% payout) perspective. FCF of $2.3B/yr far exceeds the ~$1.36B DPS outflow — leaving $950M+ annually for buybacks and debt service. The 6-year consecutive growth streak is modest but the trajectory is positive (raised $0.01/quarter in 2025). The 5.5% yield at current price of $44.29 is exceptionally attractive for a BBB+ investment-grade company. Only risk: if revenue decline accelerates and FCF compresses below $1.5B, management may slow growth. Sustainability verdict: Safe — dividend is unlikely to be cut given strong FCF coverage.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $4.31 | — | — | — | Actual |
| FY2024 | $4.31 | — | — | — | Actual |
| FY2025 | $4.10 | — | — | — | Actual |
| FY2026E | $3.33 | $3.54 | $4.18 | 22 | Estimate |
| FY2027E | $3.17 | $3.52 | $3.99 | 22 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $20.1B | — | — | — | Actual |
| FY2024 | $19.9B | — | — | — | Actual |
| FY2025 | $19.5B | — | — | — | Actual |
| FY2026E | $17.7B | $18.6B | $19.6B | 22 | Estimate |
| FY2027E | $17.4B | $18.4B | $19.6B | 22 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $50.19 | Range $44–$63
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Street High | Various | Buy | $63 | +42.2% |
| Matthew Smith | Stifel | Strong Buy | $50 | +12.9% |
| Alexia Howard | Bernstein | Hold | $48 | +8.4% |
| Andrew Lazar | Barclays | Hold | $46 | +3.9% |
| Robert Moskow | TD Cowen | Hold | $45 | +1.6% |
| Megan Alexander | Morgan Stanley | Sell | $44 | -0.7% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q3 FY2025 | $0.94 vs $0.92 | +$0.02 ✅ | $4.8B vs $4.9B | $-0.0B ❌ | Lowered |
| Q4 FY2025 | $1.01 vs $0.99 | +$0.02 ✅ | $4.9B vs $4.9B | $-0.0B ❌ | Maintained |
| Q1 FY2026 | $0.87 vs $0.84 | +$0.03 ✅ | $4.8B vs $4.8B | $-0.0B ❌ | Maintained |
| Q2 FY2026 | $0.92 vs $0.90 | +$0.02 ✅ | $4.7B vs $4.8B | $-0.1B ❌ | Stable; lowered full-yr EPS |
(e) Confidence Band Commentary
The FY2026E EPS consensus range ($3.33–$4.18) is unusually wide for a mature consumer staples company — reflecting genuine uncertainty about how quickly revenue decline will slow and whether Blue Buffalo pet food margins can recover. Bears argue -13.7% EPS decline is just the beginning; bulls see buybacks supporting per-share earnings. Revenue consensus of -4.4% for FY2026 is the key swing factor. EPS surprises have been modestly positive in 3 of last 4 quarters, but revenue consistently missed. This is a company "beating on cost cuts while missing on top-line" — a warning sign for long-term earnings power.
⚖️ DDM Verdict: ACCUMULATE — General Mills (GIS)
Current price: $44.29 | Analyst Avg PT: $50.19
$40
🔴 Bear
$50
📊 Base
$63
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$46 | Begin position |
| Tier 2 — Add | ≤$45 | Add on weakness |
| Tier 3 — Full | ≤$42 | Full allocation |
| Sell Alert | ≥$54 | Above fair value — consider trimming |
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 3,292.95 |
| Average Cost Basis | $63.09 |
| Current Market Value | $145,845 |
| Unrealized P&L | $-61,907 (-29.8%) |
| Annual Dividend Income | $0/yr |
| Yield on Cost | 0.00% |
| vs Target Position (~$200K) | $145,845 vs $200,000 (73% of target) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.