Deutsche Bank Cautious On General Mills Ahead Of Q2 Print

General Mills, Inc. (NYSE: GIS) will report its second-quarter results on Wednesday before market open. Analysts are expecting the company to earn $0.77 per share in the quarter.

In a note to clients on Monday, Eric Katzman of Deutsche Bank expressed a cautious view heading in to the earnings report with an EPS estimate of $0.76, a penny below the consensus estimate. The analyst expects General Mills to report sales of $4.8 billion, representing a decline of 2 percent from a year ago.

Katzman expects the company's EBIT will dip to 11 percent from a year ago to $750 million, while margins are expected to fall 160 basis points from a year ago to 15.8 percent.

Katzman notes that the thesis behind his recent downgrade of shares to Hold in November remains. The analyst cited "difficult industry trends" including headwinds in the key U.S. retail market that are "proving increasingly challenging." The analyst adds that he worries over EPS risk in the coming quarters and view valuation at 17-18x C2015E P/E as "less compelling."