Analyst Sentiment Cools on General Mills Amid Earnings Miss and Cost Headwinds

Deutsche Bank slashed its General Mills price target to $32 after Q4 earnings missed estimates. The firm maintains a Hold rating amid strategic brand revivals and cost pressures.

Deutsche Bank has taken a more cautious stance on General Mills, significantly reducing its price target for the stock. In a recent move, the bank slashed its target to $32 from $38, a figure that now sits approximately 13.5% below the current trading price. While the firm maintained its "Hold" rating, the downward revision sends a clear signal of diminished confidence following the company's latest financial report.

Quarterly Performance Falls Short

The packaged food giant's recent quarterly results failed to meet market expectations. General Mills reported earnings per share of $0.64, notably below the consensus estimate of $0.73. Revenue also declined, coming in at $4.44 billion. This represents a year-over-year decrease of 8.4%, marking another period where the company's performance did not align with analyst forecasts.

The view across major financial institutions is mixed. Goldman Sachs maintains a neutral position with a $40 price target. UBS expresses greater skepticism, issuing a "Sell" recommendation alongside a $35 target. The broader analyst consensus currently leans toward a "Reduce" rating, with an average price target of $43.56.

Strategic Brand Revival and Product Reformulation

In response to ongoing revenue challenges, General Mills is implementing several strategic initiatives. One notable move is the planned reintroduction of the La Tiara brand, a line of taco shells originally launched in 1960 and acquired by General Mills in 2025. The brand is scheduled for a comeback in April 2026, with an exclusive retail launch in Walmart stores across the United States.

Concurrently, the company has accelerated one of its internal product reformulation goals. As of March, its entire school feeding product portfolio is now produced without certified color additives—a target originally set for the summer of 2026. The company aims to extend this clean-label initiative to its complete U.S. cereal portfolio by mid-2026 and to its entire U.S. retail portfolio by the end of 2027.

Persistent Macroeconomic Challenges

External cost pressures continue to pose significant headwinds. Prices for nitrogen fertilizer remain elevated, currently about 50% higher than previous levels, while crude oil trades around $112 per barrel. Looking ahead, analysts project a U.S. inflation rate of 4.2% for 2026, an economic environment expected to sustain margin pressure for food manufacturers.

General Mills shares are currently trading roughly 20% below their 200-day moving average. The critical question for investors is whether the company's brand strategy and product reformulations will be sufficient to catalyze a recovery. The next set of quarterly figures will provide the clearest test, and analysts are likely to reassess their price targets based on that performance.