How about a little upgrade with your Tuesday morning breakfast? Morgan Stanley thought it was a good idea, boosting General Mills (NYSE: GIS) to Overweight from Equal-Weight and added it was late in making the upgrade. The brokerage cited valuation as the reason for the upgrade, noting that GIS is "one of the best positioned" companies in the realm of food. Morgan Stanley felt that this was not reflected in GIS's valuation, so it upped the food firm and raised its price target to $72 from $64.
Technically, the $72 level seems a bit too far off for my taste, especially since the stock's all-time high is $72.01. With the shares currently dealing with the $64-65 region, that $72 level may seem like a pipe dream. Is it impossible for the stock to make it that high? No, but it may take quite a bit of time.
Let's give GIS its due, since bottoming in the $47 region earlier this year, it has turned in outstanding performance. However, any further hitch in the economy could cause the stock to tumble yet again. Of course, the stock does have its 10- and 20-week moving averages that it can rely on for support -- these trendlines are backed up by their monthly counterparts as well.
Bottom line: it may take a while for the stock to reach its target, but it certainly seems like GIS is a relatively safe play in the wild world of cereal.
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