General Mills Upgraded by RBC After Pet Segment Growth and Fresh Food Launch

General Mills Inc. (NYSE:GIS) ranks among the best FMCG stocks to buy. On June 26, RBC Capital Markets increased its price target for General Mills Inc. (NYSE:GIS) to $63 and upgraded its rating from Sector Perform to Outperform. The firm emphasized its most recent quarter, when organic sales in North America Pet increased 3%, above analysts’ projections of a 2% drop.

Additionally, General Mills Inc. (NYSE:GIS) announced the nationwide launch of its first refrigerated pet food, Blue Buffalo Love Made Fresh. According to management, the fresh pet market is currently valued at about $3 billion and has the potential to reach $10 billion “over the next several years.”

RBC stated that although the introduction will initially impact margins, distribution issues should be minimized due to the company’s experience with chilled dough products.

RBC stated that private-label product competition is fierce and that it continues to observe pressure on packaged food valuations. However, the firm believes that General Mills’ steady stream of income, strong retention rates, and low leverage prevent further multiple compression, characterizing the risk-reward profile as “relatively balanced” following the stock’s decline.

General Mills Inc. (NYSE:GIS) is a prominent American multinational corporation known for manufacturing and promoting branded processed consumer foods that are extensively marketed through retail channels.

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