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Mondelez Rises 8% in 3 Months: How Should You Play the Stock?
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Mondelez International, Inc.’s (MDLZ - Free Report) shares have gained 7.5% in the past three months, surpassing the industry and the broader S&P 500 index’s growth of 4.6% and 4.5%, respectively. This performance stems from a strategic emphasis on core categories and targeted initiatives to streamline and reshape the company's portfolio.
Image Source: Zacks Investment Research
MDLZ stock last traded at $71.91 and is 6.8% below its 52-week high of $77.20, touched on Feb. 2, 2024. The stock is trading above its 200-day moving average, which indicates robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in MDLZ’s financial health and prospects.
Let us take a deeper dive into Mondelez's fundamentals, market position and prospects to assess the optimal course of action for investors. Should they invest more or hold their current position? Let us analyze the situation further.
Decoding MDLZ’s Strategies
Mondelez has stayed focused and agile in executing its long-term growth strategies, centered around core categories such as chocolate, biscuits and baked snacks. These categories continue to be consumer’s favorites, driven by strong loyalty to the company’s iconic brands. MDLZ’s broad geographic reach further reinforces its ability to achieve sustained long-term growth.
As inflation eases, Mondelez is experiencing a rebound in volume growth. This shift has led to a slowdown in private-label growth across key categories, while branded products are gaining market share. Despite softness in many food and beverage segments, the snacking category remains resilient, further supporting the company’s performance.
Mondelez is experiencing positive value growth in biscuits and chocolate categories with seasonal chocolate volumes increasing 0.6% year to date, per the second-quarter earnings release. This growth is driven by robust demand for seasonal shapes, novelties and bite-sized products. Consumers are demonstrating their willingness to spend, highlighting that holidays like Easter are incomplete without chocolate.
Mondelez has always been keen on reshaping its portfolio through prudent acquisitions and divestitures. On Oct. 1, 2024, Mondelez announced that its corporate venture capital arm, SnackFutures Ventures, has acquired a minority stake in Urban Legend, a rapidly growing “better-for-you” fresh doughnut and pastry company in the United Kingdom. This should help Mondelez to enhance its capabilities in the fast-growing fresh bakery space.
What May Pull Back Mondelez’s Momentum?
Mondelez is navigating a challenging and dynamic operating environment, marked by rising input costs and varying levels of consumer uncertainty across regions. In North America, some consumers seek budget-friendly snacks, while others prefer multipacks for better value and convenience. China and Brazil demonstrate resilience, but India struggles with food inflation and economic pressures, resulting in shifts in spending habits and down-trading behavior.
Mondelez has also been grappling with rising cocoa prices, which have put significant cost pressures on its chocolate segment. Mondelez expects high cocoa prices to serve as a significant headwind in the second half of 2024.
MDLZ’s Earnings Estimate Follow Suit
Mondelez is currently in a tough spot. The Zacks Consensus Estimate for EPS has seen downward revisions. In the past seven days, the consensus estimate for the current and the next fiscal year has decreased 1 cent each to $3.49 and $3.57 per share, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Image Source: Zacks Investment Research
Unlocking MDLZ’s Valuation
Mondelez's forward 12-month price-to-earnings ratio stands at 20.18, significantly higher than the industry’s ratio of 16.58. This suggests that investors may be paying a high price relative to the company's expected earnings growth. MDLZ’s Value Score of C further underscores these concerns.
Image Source: Zacks Investment Research
Mondelez Stock Analysis
Mondelez's recent stock performance, combined with its long-term growth strategies in core categories, showcases the company's resilience and potential for sustained growth. The positive value growth in MDLZ’s biscuit and chocolate segments, along with strategic acquisitions, further strengthens its market position.
However, investors must consider challenges such as a dynamic operating landscape and soaring cocoa prices. While potential investors might want to wait for a better entry point, current investors may find it prudent to hold onto MDLZ, given the stock’s long-term prospects. Currently, Mondelez carries a Zacks Rank #3 (Hold).
Chefs' Warehouse together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. CHEF has a trailing four-quarter earnings surprise of nearly 33.7%, on average.
The Zacks Consensus Estimate for Chefs' Warehouse’s current quarter’s sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Flowers Foods produces and markets packaged bakery food products in the United States. FLO delivered an earnings surprise of 2% in the last reported quarter.
The Zacks Consensus Estimate for Flowers Foods’ current-financial year’s sales and earnings implies growth of 1% and 5%, respectively, from the year-ago reported numbers.
McCormick & Company manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. MKC has a trailing four-quarter earnings surprise of around 13.8%, on average.
The Zacks Consensus Estimate for McCormick & Company’s current-financial year’s sales and earnings suggests a rise of 0.6% and 8.2%, respectively, from the year-earlier reported figures.
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Mondelez Rises 8% in 3 Months: How Should You Play the Stock?
Mondelez International, Inc.’s (MDLZ - Free Report) shares have gained 7.5% in the past three months, surpassing the industry and the broader S&P 500 index’s growth of 4.6% and 4.5%, respectively. This performance stems from a strategic emphasis on core categories and targeted initiatives to streamline and reshape the company's portfolio.
Image Source: Zacks Investment Research
MDLZ stock last traded at $71.91 and is 6.8% below its 52-week high of $77.20, touched on Feb. 2, 2024. The stock is trading above its 200-day moving average, which indicates robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in MDLZ’s financial health and prospects.
Let us take a deeper dive into Mondelez's fundamentals, market position and prospects to assess the optimal course of action for investors. Should they invest more or hold their current position? Let us analyze the situation further.
Decoding MDLZ’s Strategies
Mondelez has stayed focused and agile in executing its long-term growth strategies, centered around core categories such as chocolate, biscuits and baked snacks. These categories continue to be consumer’s favorites, driven by strong loyalty to the company’s iconic brands. MDLZ’s broad geographic reach further reinforces its ability to achieve sustained long-term growth.
As inflation eases, Mondelez is experiencing a rebound in volume growth. This shift has led to a slowdown in private-label growth across key categories, while branded products are gaining market share. Despite softness in many food and beverage segments, the snacking category remains resilient, further supporting the company’s performance.
Mondelez is experiencing positive value growth in biscuits and chocolate categories with seasonal chocolate volumes increasing 0.6% year to date, per the second-quarter earnings release. This growth is driven by robust demand for seasonal shapes, novelties and bite-sized products. Consumers are demonstrating their willingness to spend, highlighting that holidays like Easter are incomplete without chocolate.
Mondelez has always been keen on reshaping its portfolio through prudent acquisitions and divestitures. On Oct. 1, 2024, Mondelez announced that its corporate venture capital arm, SnackFutures Ventures, has acquired a minority stake in Urban Legend, a rapidly growing “better-for-you” fresh doughnut and pastry company in the United Kingdom. This should help Mondelez to enhance its capabilities in the fast-growing fresh bakery space.
What May Pull Back Mondelez’s Momentum?
Mondelez is navigating a challenging and dynamic operating environment, marked by rising input costs and varying levels of consumer uncertainty across regions. In North America, some consumers seek budget-friendly snacks, while others prefer multipacks for better value and convenience. China and Brazil demonstrate resilience, but India struggles with food inflation and economic pressures, resulting in shifts in spending habits and down-trading behavior.
Mondelez has also been grappling with rising cocoa prices, which have put significant cost pressures on its chocolate segment. Mondelez expects high cocoa prices to serve as a significant headwind in the second half of 2024.
MDLZ’s Earnings Estimate Follow Suit
Mondelez is currently in a tough spot. The Zacks Consensus Estimate for EPS has seen downward revisions. In the past seven days, the consensus estimate for the current and the next fiscal year has decreased 1 cent each to $3.49 and $3.57 per share, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Image Source: Zacks Investment Research
Unlocking MDLZ’s Valuation
Mondelez's forward 12-month price-to-earnings ratio stands at 20.18, significantly higher than the industry’s ratio of 16.58. This suggests that investors may be paying a high price relative to the company's expected earnings growth. MDLZ’s Value Score of C further underscores these concerns.
Image Source: Zacks Investment Research
Mondelez Stock Analysis
Mondelez's recent stock performance, combined with its long-term growth strategies in core categories, showcases the company's resilience and potential for sustained growth. The positive value growth in MDLZ’s biscuit and chocolate segments, along with strategic acquisitions, further strengthens its market position.
However, investors must consider challenges such as a dynamic operating landscape and soaring cocoa prices. While potential investors might want to wait for a better entry point, current investors may find it prudent to hold onto MDLZ, given the stock’s long-term prospects. Currently, Mondelez carries a Zacks Rank #3 (Hold).
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely The Chefs' Warehouse, Inc. (CHEF - Free Report) , Flowers Foods, Inc. (FLO - Free Report) and McCormick & Company, Incorporated (MKC - Free Report) , currently carrying a Zacks Rank # 2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chefs' Warehouse together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. CHEF has a trailing four-quarter earnings surprise of nearly 33.7%, on average.
The Zacks Consensus Estimate for Chefs' Warehouse’s current quarter’s sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Flowers Foods produces and markets packaged bakery food products in the United States. FLO delivered an earnings surprise of 2% in the last reported quarter.
The Zacks Consensus Estimate for Flowers Foods’ current-financial year’s sales and earnings implies growth of 1% and 5%, respectively, from the year-ago reported numbers.
McCormick & Company manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry. MKC has a trailing four-quarter earnings surprise of around 13.8%, on average.
The Zacks Consensus Estimate for McCormick & Company’s current-financial year’s sales and earnings suggests a rise of 0.6% and 8.2%, respectively, from the year-earlier reported figures.