GIS – Market expectations are for Uniform ROA expansion, but management may be concerned about growth, product launches, and profitability

• General Mills, Inc. (GIS:USA) currently trades near corporate averages relative to Uniform Earnings, with a 21.5x Uniform P/E. At these levels, markets have bullish expectations for the firm, but management may be concerned about growth, new product launches, and profitability
• Specifically, management may lack confidence in their ability to sustain growth in retail yogurt and Go-GURT sales, across their Fiber One, Haagen-Dazs, and Chewy product lines, and in their Europe, Australia, Asia, and LatAm segments. Moreover, they may be concerned about the sustainability of favorable manufacturing leverage, the quality of their data investments, and the potential of their second line of Oui products. Furthermore, management may be exaggerating their innovation capabilities and the progress of new product launches. Also, they may lack confidence in their ability to improve operating profits while focusing on growth, and they may be downplaying concerns about SG&A costs. Finally, management may be concerned about FDA regulations and poor performance for GoodBelly and YQ.