Citi Comments On GIS' "Better Than Average" Portfolio

Investors are “clearly concerned” about General Mills, Inc.'s GIS F2012 and the impact of inflation, Citi reports. “Additionally, General Mills trails the food manufacturing sector average P/E by 1 point at 14.0x CY2011 EPS,” Citi writes. “This is unusual as General Mills has historically traded at parity with the sector over the last 10 years, and with an average P/E of 16.0x. “Further, we believe the company has a better than average, health-oriented portfolio. We expect F2012 to be a good year for the company as we believe that pricing gains will be a positive and cereal category growth will improve, driven by the big 2 – General Mills & Kellogg K – acting constructively to drive category growth.”