Key Takeaways
- General Mills shares rose 5% today with Campbell’s, Conagra and Smucker after Kraft Heinz said price increases are likely in 2027.
- Investors are betting packaged-food makers can pass rising costs on to shoppers.
- Conagra’s latest quarter shows the risk: higher prices in its grocery and snacks segment came with a 5% drop in volume.
- General Mills traded at 11x forward earnings before today, under its five-year average of 15x.
General Mills (GIS) rose 5% today without a word from the company. The news came from Kraft Heinz (KHC), whose CEO said on its third-quarter call that price increases are “likely” next year.
Investors bid up the whole aisle on it, including Campbell’s (CPB), Conagra Brands (CAG) and J.M. Smucker (SJM).
Kraft Heinz expects to charge more in 2027
Kraft Heinz rose 4% after raising the low end of its 2026 organic sales outlook and agreeing to sell its North American coffee business, Maxwell House included, for $650 million.
CFO Andre Maciel said Kraft Heinz now expects inflation slightly above 5% next year, and CEO Steve Cahillane said:
“We want to take as little price as possible because of the consumer dynamic, but price is likely to have to be taken in ’27 for sure.”
That’s a change: Kraft Heinz was still cutting prices in North America last quarter.
Shoppers have to go along with it
Campbell’s rose 6% with no news of its own. Its revenue fell 5% to $9.74 billion in fiscal 2026, so price increases that stick would help.
Conagra rose 6%, and its latest quarter is the warning. In its grocery and snacks segment, price/mix added 3.4% in the quarter ended Aug. 30, while volume fell 5.4%. Will shoppers take another round next year?
Smucker, up 3%, has seen the other side. In its quarter ended July 31, higher prices added 10 points to its US retail coffee sales, and volume/mix still added 2 more. Smucker reports later this month, with Maxwell House headed to a new owner.
TIKR tracks 20 analysts on General Mills. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on General Mills, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See General Mills’ Analyst Ratings
General Mills is cheap for a reason
General Mills’ earnings are still falling. Analysts expect normalized EPS of $3.08 in fiscal 2027, which ends in May, down from $3.55:
Price increases next year would arrive after the costs Kraft Heinz is warning about, so I wouldn’t expect today’s news to lift those estimates much.
Before today, the stock traded at 11x forward earnings, against a five-year average of 15x:
At today’s price, it’s about 12x.
I think today’s jump makes sense. At that multiple, investors aren’t paying for much of an earnings recovery, and higher prices next year could deliver one. The risk is that shoppers balk, as Conagra’s grocery shoppers did. Kraft Heinz plans to say more about pricing at its investor meeting next week, and General Mills’ own next report will show whether it’s raising prices too.
So what is General Mills stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
