What Happened?
Shares of packaged foods company General Mills (NYSE:GIS) fell 2.9% in the afternoon session after the stock hit a new 52-week low amid mounting concerns over declining sales and increased government scrutiny of food industry pricing.
The food producer had struggled with declining unit sales over the previous two years, relying on price increases to offset the trend. A projected sales decline of 3.3% for the next twelve months pointed to a tougher demand environment ahead. The company's free cash flow margin also dropped, implying it became more capital-intensive.
Adding to the pressure, government officials began to question whether food companies had colluded to push prices higher. This move put the entire sector on edge as authorities expanded tariff quotas on ingredients like sugar to promote market competition.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy General Mills? Access our full analysis report here.
What Is The Market Telling Us
General Mills’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
General Mills is down 27.9% since the beginning of the year, and at $45.80 per share, it is trading 31.7% below its 52-week high of $67.01 from December 2024. Investors who bought $1,000 worth of General Mills’s shares 5 years ago would now be looking at an investment worth $760.56.
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