GIS
General Mills, Inc.
$33.70
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 54.0% below fair value
You pay
$33.70
Bear
$60.34
Fair
$73.27
Bull
$86.20
Bear
$60.34
+79.1%
$4.31 × 14x P/E
Fair
$73.27
+117.4%
$4.31 × 17x P/E
Bull
$86.20
+155.8%
$4.31 × 20x P/E
Adjust Assumptions
17.0x
4.31$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
7.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$35.64
Divergence from AlphaVal
106%
Summary
Applying a 17x P/E to adjusted EPS of $4.31, the base-case value is $73.27 per share. DDM cross-check: $50.76.
Warnings
Dividend-based valuation: $50.76 (below our primary estimate by 31%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $35.64 (from 36 analysts). Our estimate is 106% 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