General Mills Raises FY23 Guidance After Burying Pet Issues; Shares Not a Bargain

Even amid inflation, supply chain disruptions, and a weak economic backdrop, General Mills raised its fiscal 2023 guidance on both the top (10%, from 8%-9%) and bottom (7%-8%, from 4%-6%) lines. We will likely edge up our outlook (8% and 6%, respectively, preprint) into the revised ranges when the firm divulges third-quarter performance in late March. However, we don't surmise such moves will alter our $75 fair value estimate much. Shares popped at a mid-single-digit percentage clip on the news, leaving the stock a touch above our intrinsic valuation. As such, we'd suggest investors await a more attractive entry point.