Mondelez International (MDLZ): Assessing Valuation After Q3 Earnings, Slower Growth, and Lowered Outlook

Mondelez International (MDLZ) just released its third-quarter results, catching investors’ eyes as profit held steady with forecasts. However, growth slowed and margins tightened amid high cocoa prices. Management also updated its full-year outlook, opting for a more cautious stance.

See our latest analysis for Mondelez International.

After generally holding its ground in earlier quarters, Mondelez International’s share price has taken a sharper turn recently, dropping over 10% in the last 90 days and leaving its one-year total return at a disappointing -14.6%. Even with supply chain maneuvers and new efforts in AI-powered marketing, investors appear cautious in the face of tightening margins and more conservative company guidance. For now, momentum is fading rather than building.

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With this recent drop and a discounted share price compared to analyst targets, investors must weigh whether Mondelez is now a bargain, or if the market has already adjusted for its dimmer growth outlook.

Most Popular Narrative: 20.4% Undervalued

The narrative’s estimated fair value for Mondelez International is $72.71, which is notably higher than the last close price of $57.85. That gap sets the bar for a debate about what could really unlock the company’s next leg higher.

Mondelez International is executing a robust pricing strategy in response to high cocoa costs, which is expected to improve revenue as pricing takes effect globally, especially in markets like Europe and emerging markets. The company is implementing a strategic growth agenda that includes reinvesting in brands, expanding distribution, and strengthening market presence, which should positively impact revenue growth and market share.

Read the complete narrative.

Curious why this narrative targets such a hefty premium over today’s price? The real twist is that its fair value calculation compares bold future revenue expansion with potential margin improvements. But what numbers fuel that optimism? Unlock the full narrative to see what’s beneath those projections and what could tip the scales next.

Result: Fair Value of $72.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent high cocoa costs and weaker consumer demand, especially in North America, pose real risks that could challenge the company's bullish outlook.

Find out about the key risks to this Mondelez International narrative.

Build Your Own Mondelez International Narrative

If you want to see this story from a different angle or dive deeper into your own analysis, it takes less than three minutes to craft your own view. Why not Do it your way

A great starting point for your Mondelez International research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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