General Mills' (GIS) fiscal 2026 earnings per share guidance provided enough buffer for the company to deliver despite operating in a sluggish environment, RBC Capital Markets said in a Thursday research note.

On Wednesday, General Mills reported its fiscal Q1 results and said it continues to expect fiscal 2026 adjusted EPS to drop 10% to 15% in constant currency, with organic net sales still seen between down 1% and up 1%.

Noting the company's guidance, RBC said headwinds and tailwinds to profitability largely remained the same, including an input cost inflation of about 3% cost of goods sold, 5% net impact from the North America Yogurt divestitures and Whitebridge Pet Brands acquisition, among others.

Furthermore, the brokerage said it is now modeling a full-year organic decline of 0.4%, compared with a 0.1% fall previously, as RBC curbed its H2 organic sales growth estimates. RBC's EPS estimate of a 14.2% decrease remains unchanged.

RBC maintained its outperform rating and a $63 price target on General Mills' stock.

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