General Mills (NYSE: GIS) shares continue to trade above the $60 support level ahead of Q3 earnings results. The company will publish Q3 results on Wednesday, March 24th, before the market open.
Fundamental analysis: General Mills will report Q3 earnings results on March 24th
General Mills, Inc., is an American multinational manufacturer and marketer of branded consumer foods, including Gold Medal flour, Annie’s Homegrown, Betty Crocker, Yoplait, Colombo, among others. General Mills will report Q3 earnings results this Wednesday, and according to analysts, Q3 2021 results should be better than in the previous year.
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General Mills has benefited from the increase in meals eaten at home during the pandemic, and the consensus revenue estimate is $4.46B (+6.7% Y/Y). The EPS estimate stands around $0.84 (+9.1% Y/Y), but it is important to mention that General Mills has beaten EPS estimates every time over the last two years.
The company increased its revenue in 2020 to $17.62B from $16.86B in 2019, and the growth projects will ensure that the numbers will be moving up in the future. If we compare the company’s EBITDA of $3.7B and the market capitalization of $36.7B, we can notice that this stock is not overvalued and has still room to grow.
Credit Suisse and Wells Fargo also reported an optimistic view for General Mills as it continues to increase profit and market share in many areas. The board of directors said at the Consumer Analyst Group of New York (CAGNY) 2021 Conference that the COVID-19 pandemic will continue to drive elevated consumer demand for food at home.
Still, they hope that consumers will retain their habits and after the pandemic. This company will continue to grow on positive consumer preferences, but if the U.S. stock market enters a correction phase, the share price could be at much lower levels.
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Technical analysis: $65 represents the first resistance level
General Mills shares didn’t change too much since the beginning of the 2021 year, and at the current stock price, this company is fairly valued, in my opinion.
The current support levels are $60 and $55, $65 and $70, represent the important resistance levels. If the price jumps above $65 resistance, it would be a signal to buy shares, and the next target could be around $68 or even $70.
Rising above $70 supports the continuation of the bullish trend for General Mills shares, but if the price falls below $55, it would be a strong “sell” signal.
General Mills will report Q3 earnings results this Wednesday, and according to analysts, Q3 2021 results should be better than in the previous year. The company’s business continues to perform well, but General Mills’ shares didn’t change too much since the beginning of 2021. If the price jumps above $65 resistance, the next target could be around $68, but if the price falls below $55, it would be a strong “sell” signal.