13 Dec Goldman says a quick profit can be made before year-end with an options bet against this stock
There are few earnings reports left before the end of the year, but one of them offers an opportunity for options traders to make a quick profit, according to Goldman Sachs. Food products company General Mills is set to report is fiscal second quarter results on the morning of Dec. 20, and Goldman’s analyst on the stock sees the report as a potential downside catalyst. “Goldman Sachs Consumer Staples analyst Jason English believes Sell-rated General Mills (GIS) will continue to be impacted by a tough demand/competitive environment in its key segments of Pets and North American Retail, pressuring volume recovery in the near-to-medium term and warranting incremental negative re-calibration of street expectations,” Sesha Phani of Goldman’s derivatives research team said in a note to clients Wednesday. Because of this forecast, Goldman recommends that options investors buy put options on General Mills that expire in January and have a strike price of $65 per share. Put options give their holders the right to sell a stock at a certain price, and are effectively a bet that the stock price will fall below the strike price. General Mills are currently trading at $67 a share. GIS YTD mountain Shares of General Mills have struggled in 2023. When buying put options, the risk is limited to the upfront price paid to purchase the contract. If the stock rises instead, the option will expire worthless. General Mills is already out of favor with investors. The stock has fallen 20% year to date, and the majority of Wall Street analysts have given it a holding rating, according to LSEG. — CNBC’s Michael Bloom contributed reporting. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.