As of June 21, 2025, General Mills Inc's estimated intrinsic value ranges from $62.04 to $108.92 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $108.92 | +105.5% |
| Discounted Cash Flow (5Y) | $89.90 | +69.7% |
| Dividend Discount Model (Multi-Stage) | $69.22 | +30.6% |
| Dividend Discount Model (Stable) | $67.44 | +27.3% |
| Earnings Power Value | $62.04 | +17.1% |
Is General Mills Inc (GIS) undervalued or overvalued?
With the current market price at $52.99, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate General Mills Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.35 | 0.57 |
| Cost of equity | 5.5% | 8.1% |
| Cost of debt | 4.0% | 4.8% |
| Tax rate | 19.1% | 19.5% |
| Debt/Equity ratio | 0.44 | 0.44 |
| After-tax WACC | 4.8% | 6.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $90 | $62,894M | 80.6% |
| 10-Year Growth | $109 | $73,310M | 64.8% |
| 5-Year EBITDA | $61 | $46,963M | 74.0% |
| 10-Year EBITDA | $82 | $58,514M | 55.9% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,670M |
| Discount Rate (WACC) | 6.8% - 4.8% |
| Enterprise Value | $39,414M - $55,868M |
| Net Debt | $13,666M |
| Equity Value | $25,748M - $42,202M |
| Outstanding Shares | 548M |
| Fair Value | $47 - $77 |
| Selected Fair Value | $62.04 |
| Metric | Value |
|---|---|
| Market Capitalization | $29017M |
| Enterprise Value | $42683M |
| Trailing P/E | 11.34 |
| Forward P/E | 12.06 |
| Trailing EV/EBITDA | 9.25 |
| Current Dividend Yield | 458.17% |
| Dividend Growth Rate (5Y) | 3.33% |
| Debt-to-Equity Ratio | 0.44 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $32.68 |
| Discounted Cash Flow (5Y) | 25% | $22.47 |
| Dividend Discount Model (Multi-Stage) | 20% | $13.84 |
| Dividend Discount Model (Stable) | 15% | $10.12 |
| Earnings Power Value | 10% | $6.20 |
| Weighted Average | 100% | $85.31 |
Based on our comprehensive valuation analysis, General Mills Inc's weighted average intrinsic value is $85.31, which is approximately 61.0% above the current market price of $52.99.
Key investment considerations:
Given these factors, we believe General Mills Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.