GIS
General Mills, Inc.
$33.69
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 55.0% below fair value
You pay
$33.69
Bear
$61.66
Fair
$74.87
Bull
$88.08
Bear
$61.66
+83.0%
$5.16 × 14x P/E
Fair
$74.87
+122.2%
$5.16 × 17x P/E
Bull
$88.08
+161.5%
$5.16 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
6.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $44.75 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $74.87 per share.
Warnings
Dividend-based valuation: $58.08 (below our primary estimate by 34%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $44.75 (from 34 analysts). Our estimate is 96% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples