Does the Recent 8.7% Drop Make Mondelez a Value Opportunity in 2025?

• Thinking about whether Mondelez International is a bargain right now? Let's break down the numbers and see if this household snack giant is offering value that matches its brand strength.
• Shares have dipped 8.7% over the past year, and are down 3.2% since January, despite a slight 1% gain in the past week. This hints at shifting investor sentiment and fresh questions around growth potential.
• There has been some buzz around the company’s expansion into emerging markets and its continued acquisition activity, with analysts watching carefully to see if recent brand additions and global ambitions can spark a turnaround in market confidence.
• On our valuation scorecard, Mondelez International racks up a solid 5 out of 6. But is that the full story? We'll walk through the standard valuation approaches and reveal an even better way to assess whether Mondelez is really undervalued at the end of this analysis.

Mondelez International delivered -8.7% returns over the last year. See how this stacks up to the rest of the Food industry.

Approach 1: Mondelez International Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the present value of a business by projecting its future cash flows and discounting them back to today. For Mondelez International, this involves examining the amount of money the company is expected to generate in the coming years and evaluating what those future dollars are worth in today's terms.

Currently, Mondelez generates annual Free Cash Flow of $2.3 billion. Analysts project steady growth, with Free Cash Flow expected to reach nearly $5 billion by the end of 2028. While analyst estimates typically extend five years, later projections, stretching out toward 2035, are extrapolated using trends from prior years and suggest continued growth.

According to this DCF model, the estimated intrinsic value for Mondelez International stock is $113.95. Compared to the current share price, this figure indicates the stock is trading at roughly a 49.5 percent discount to its fair value, which may suggest undervaluation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Mondelez International is undervalued by 49.5%. Track this in your watchlist or portfolio, or discover 913 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mondelez International.

Approach 2: Mondelez International Price vs Earnings

The Price-to-Earnings (PE) ratio is a common metric for valuing profitable companies like Mondelez International, as it compares a company’s current share price to its per-share earnings. For businesses with established earnings power, this multiple provides a quick measure of how much investors are willing to pay for a dollar of profits. This makes it especially relevant for mature and stable players in the snack industry.

A "normal" or "fair" PE ratio for a company depends on factors such as expected earnings growth, profitability, and the company’s risk profile. Generally, higher growth and lower risk justify a higher PE ratio, while slower growth or higher risk suggest a lower one. Mondelez International currently trades at a PE of 21x, which is closely aligned with the food industry average of 21x and is below the average of its listed peers at 26x.

What sets Simply Wall St’s "Fair Ratio" apart is its tailored approach. For Mondelez International, the Fair PE Ratio is calculated at 22x. This proprietary metric incorporates not only typical benchmarks but also emphasizes forward-looking growth, profit margins, risk, and overall market cap to set a more nuanced baseline for valuation. By factoring in these diverse elements, the Fair Ratio delivers a more complete picture than simply comparing with industry averages or peers.

With Mondelez’s current PE of 21x closely matching its Fair Ratio of 22x, the stock appears fairly valued by this measure.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1439 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Mondelez International Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your story about a company—your view of its future, what matters most, and how the business will perform in the years ahead. Narratives connect what you believe about a company like Mondelez International directly to the numbers: your assumptions about future revenues, profits, margins, and, ultimately, your calculation of fair value.

Using Simply Wall St's platform, you can easily create or explore Narratives on the Community page, making it accessible for both new and seasoned investors. Narratives empower you to decide when to buy or sell by comparing your Fair Value estimate to the real-time share price. They are refreshed instantly whenever major news or earnings updates are released, so your insight is always up to date.

For Mondelez International, for example, investors posting Narratives have fair value estimates that range from $67 per share (with a more conservative outlook on earnings and market risks) up to $88 per share (reflecting optimism about margin expansion and demand recovery). Narratives make it easy to see both sides and help you invest based on what you think really matters.

Do you think there's more to the story for Mondelez International? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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