General Mills, Inc.GISNYSE

Overview Intelligence Charts News Fundamentals DCF Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $100.58 per share(market-calibrated)

+121.7%

Upside to Fair Value

Current

$45.36

Pure Model

$111.07

Fair Value

$100.58

Bull Case

$124.26

Bear Case

$101.39

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $111.07.

What's Driving This Ratingfor GIS

↓

CapEx normalizing toward maintenance

Historical CapEx is 3.27% of revenue (heavy investment phase). Model fades this to 3.00% by Year 10, freeing up ~$58M in annual FCF. This is the biggest driver of long-term cash flow improvement.

→

Moderate revenue growth

Analyst consensus projects -4.34% revenue growth, fading to 2.50% by Year 10. Revenue reaches $21.3B (vs $19.5B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 67.34% indicates efficient cash generation. FCF reaches $3.0B by Year 10 (14.03% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)-0.06

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)4.22%

Cost of Debt

Pre-tax Cost of Debt2.93%

Tax Rate19.83%

After-tax Cost of Debt2.35%

Equity Weight (E/V)62.18%

Debt Weight (D/V)37.82%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (62.18% × 4.22%) + (37.82% × 2.35%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$18.6B	$18.8B	$19.3B	$19.9B	$21.3B
EBIT	$3.3B	$3.4B	$3.5B	$3.6B	$3.8B
Tax	$664M	$671M	$687M	$709M	$758M
NOPAT	$2.7B	$2.7B	$2.8B	$2.9B	$3.1B
+ Depreciation	$538M	$543M	$556M	$575M	$614M
- Capex	$610M	$605M	$608M	$616M	$639M
- Δ NWC	-$85M	$35M	$24M	$34M	$52M
Free Cash Flow	$2.7B	$2.6B	$2.7B	$2.8B	$3.0B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$2.6B	$2.2B	$2.1B	$1.9B	$1.7B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$3.0B

Terminal Growth Rate2.50%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$102.1B

PV of Terminal Value$59.8B

Exit Multiple Method

Year 10 EBITDA$4.4B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$88.7B

PV of Terminal Value$52.0B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$20.7B

PV of Terminal Value$59.8B

Enterprise Value$80.4B

(-) Net Debt$14.9B

Equity Value$65.5B

Shares Outstanding555M

Price per Share$118.12

Exit Multiple Method

PV of Projected FCFs$20.7B

PV of Terminal Value$52.0B

Enterprise Value$72.6B

(-) Net Debt$14.9B

Equity Value$57.7B

Shares Outstanding555M

Price per Share$104.02

Pure Model Fair Value

$111.07

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
3.50%	$167.94	$160.12	$152.67	$145.58	$138.81
4.50%	$122.45	$134.54	$152.67	$145.58	$138.81
5.50%	$97.20	$103.15	$111.07	$122.17	$138.81
6.50%	$80.34	$83.73	$87.98	$93.44	$100.72
7.50%	$67.87	$70.00	$72.56	$75.68	$79.58

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$101.39

123.5% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: -0.08

Base Case

$111.07

144.9% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: -0.06

Bull Case

$124.26

174.0% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.30

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-4.34%

Year 3 Revenue Growth1.90%

Year 5 Revenue Growth1.23%

Year 7 Revenue Growth1.74%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin17.95%

Tax Rate19.83%

Historical Capex / Rev3.27%

Terminal Capex / Rev3.00%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Defensive sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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