Wells Fargo Downgrades General Mills, Cuts Price Target to $35
Analysts at Wells Fargo downgraded General Mills to Underweight, citing expected leverage above 4x by 2027 and tight dividend payouts. The firm cut its FY27 EPS estimate by 6% and lowered the price target to $35 based on reduced earnings multiples.
1. Downgrade Overview
Analysts at Wells Fargo downgraded General Mills to Underweight, citing earnings pressure from sluggish consumption trends and tight selling, general and administrative budgets.
2. Elevated Leverage and Dividend Risks
Leverage is projected to exceed 4x by 2027, the highest in the coverage group, while dividend payout ratios remain near uncomfortable levels, raising concerns over financial flexibility.
3. EPS Forecast Revisions and Price Target Cut
FY27 EPS estimates were cut by 6% relative to consensus, and the price target was lowered to $35 based on revised earnings multiples.
4. Potential Upside Scenarios
Better summer consumption, easing inflation or improved cost savings could drive upside, but negative catalysts are likely to dominate in the near term.