General Mills Maintains $42 Price Target as Retail Volumes Slide 5%
Jefferies maintained a Hold rating on General Mills with a $42 price target, citing U.S. Retail volumes down 3% over the past 12 weeks and 5% in the 4-week period, with organic sales forecast to fall 5.7% in fiscal Q3. Management plans to cut 20% of low-productivity cereal SKUs.
1. Rating and Outlook
Jefferies maintained a Hold rating on General Mills and a $42 price target, below its recent share price near $45, projecting a multi-year recovery that hinges on whether recent price investments drive sustained volume growth.
2. North America Retail Volume Trends
North America Retail volumes fell about 3% over the 12 weeks ending Feb. 21 and roughly 5% in the latest four-week period, with Jefferies forecasting a 5.7% decline in organic sales for fiscal Q3 2026.
3. SKU Rationalization Strategy
Management plans to rationalize approximately 20% of lower-productivity cereal SKUs, reflecting persistent category and brand-level challenges that have limited the impact of shelf-price reductions across two-thirds of the NAR portfolio.
4. Broader Headwinds and Pet Segment Update
Broader headwinds include weak consumer sentiment, pressures from SNAP benefit changes and GLP-1-related consumption shifts, while the Pet segment saw sequential tracked-channel retail sales growth of 3%, driven by volume-led gains from Blue Buffalo alongside underperformance in the Wilderness brand.