General Mills (GIS) is giving back some recent gains today after reporting fiscal third-quarter earnings per share (EPS) of $0.96 vs. $0.82, falling $0.02 short of expectations.

While sales growth of 8% and organic sales growth of 7% exceeded expectations of 6.5%, the company was unable to leverage more of these sales to the bottom line than was expected due to higher raw material and shipping costs, as well as investments in media and marketing. The higher costs issue will be one we will likely see a lot of this earnings season, so I think it is unfair to single out GIS for this report.

While comparisons for the next few quarters will be difficult, as excess demand stemming from the pandemic wanes, I still expect GIS to earn $3.55 a share in the May 2022 fiscal year, down from $3.70 in the current year. At 16.3X this conservative estimate, with a dividend yield of 3.3%, I still believe there is excellent value in GIS in the still historically low-interest-rate environment.

GIS is a buy below $59. My price target is $65.