RBC downgrades General Mills on plunging Yoplait yogurt sales
RBC Capital Markets lowered its rating for General Mills shares to sector perform from outperform, saying the Yoplait yogurt maker's financial results will come in below the company's targets in the coming year. "While center-store food category sales trends have broadly eroded, it appears that Mills' yogurt declines (as well as cereal, soup, and dough) are too much to overcome near-term," analyst David Palmer wrote in a note to clients Thursday. "We now believe it is unlikely that Mills will meet its full-year FX-neutral global sales growth target of flat to down 2% ... and this may pressure full-year adjusted EPS." Palmer lowered his General Mills price target to $69 from $73, representing 10 percent upside from Wednesday's close. The analyst cited Nielsen data that revealed the company's U.S. trailing three-month overall sales through Dec. 3 fell by 7 percent, down from negative 6 percent growth in the previous quarter. In addition, the company's overall unit volume numbers declined by 12 percent versus a 9 percent decrease in the previous period. General Mills' trailing three-month sales for yogurt specifically were down 18 percent, the data showed. "Yogurt declines alarming amid a poor volume environment," he wrote. "While it is conceivable that cereal growth can return to growth, the recent deterioration in yogurt has been concerning—especially since it has coincided with lower competitive price pressure," he added. — CNBC's Michael Bloom contributed to this story.

A customer picks up a General Mills Inc. Yoplait brand yogurt at a supermarket in Princeton, Illinois, U.S. Daniel Acker | Bloomberg | Getty Images