Investing

Earnings Previews: GameStop, Adobe, General Mills, Winnebago

General Mills

Before markets open Wednesday, General Mills Inc. (NYSE: GIS) is expected to report results. Like many other companies in other sectors, the maker of Cheerios and dozens of other consumer packaged food brands got a sales boost as people stocked up on food to get through the COVID-19 induced lockdowns. The share price rose 13.6% in 2020, and the dividend payments totaled $1.98 for the year, yielding a total return of almost 17.5%.

For the company’s fiscal third quarter that ended in February, analysts are forecasting EPS of $0.84 on sales of $4.45 billion. Sequential revenue growth is forecast to be down by about half a percentage point, reflecting an anticipated slowdown in consumer sales. For the fiscal year ending in May, consensus estimates call for EPS of $3.75 on sales of $17.8 billion.

The consensus price target on the stock is $62.99, implying a potential upside of about 3.8% to the current price of around $60.70. At the high price target of $73 a share, the implied gain is about 20%.

The stock’s 52-week range is $46.88 to $66.14, and the current annual dividend is $2.04 (a yield of 3.4%). General Mills stock trades an average of around 4.5 million shares a day.

Winnebago

And Winnebago Industries Inc. (NYSE: WGO) is scheduled to report fiscal 2021 second-quarter results on Wednesday morning. Recreational vehicle (RV) sales boomed last year as the consumers saw them as a way safely to get out of the house. The RV Industry Association (RVIA) reported that Class B motorhome sales soared 98% last year.

The number of Americans planning to take a trip in their RVs this year is figured to increase from 46 million to 61 million. Here’s the RVIA’s demographic breakdown of likely RV buyers this year: Millennials, 31%; Gen X, 26%; and Gen Z, 21%. The RVIA survey showed that 25% of all respondents were likely to buy an RV by November 2021.

Winnebago’s stock price rose by about 14.2% last year but has jumped by 37% so far in 2021. Over the past 12 months, the stock soared 263%, with more than half the gain coming between late March and late June of last year.

Analysts are looking for EPS of $1.41 on sales of $805.2 million for the quarter that ended in February. That’s a sequential increase of just 1.5% compared with a prior quarter gain of around 7.5%. The year-over-year revenue total is forecast to jump 86%, which seems a little optimistic given that year-over-year growth in the two prior quarters was less than 40%.

At the current trading price of around $81.50, the stock trades above the consensus price target but 19% below the high target of $97.00. The stock’s 52-week range is $20.42 to $87.53, and Winnebago trades an average of around 700,000 shares a day.