Mondelez International (MDLZ): Assessing Valuation Ahead of Earnings as Higher Cocoa Costs Challenge Outlook

All eyes are on Mondelez International (MDLZ) ahead of its third-quarter earnings announcement, as investors weigh rising raw material costs, especially cocoa, against the company’s track record of international revenue growth.

See our latest analysis for Mondelez International.

Amid anticipation for its upcoming earnings, Mondelez International’s recent share price has ticked up nearly 5% year-to-date. However, its one-year total shareholder return is still down a shade over 10%. Momentum seems to be softening, as investors react to cost headwinds and shifting risk perceptions. This comes despite international growth and new tech partnerships offering longer-term promise.

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The key question now, as the market weighs upcoming results and recent cost pressures, is whether Mondelez shares are undervalued going into earnings or if these risks and future growth are already fully reflected in today’s price.

Most Popular Narrative: 14.1% Undervalued

With the consensus narrative placing fair value at $72.71, Mondelez International’s current share price of $62.46 signals a noticeable gap and fuels debate on what could drive shares higher from here.

The company is implementing a strategic growth agenda that includes reinvesting in brands, expanding distribution, and strengthening market presence. These initiatives are positioned to positively impact revenue growth and market share. Mondelez’s focus on innovative brand activations and product collaborations, such as the Oreo and Post Malone partnership and Cadbury Dairy Milk with Lotus Bakeries, is expected to enhance consumer engagement and drive revenue growth.

Read the complete narrative.

Want to know the financial engineering behind this valuation pop? The story hinges on double-digit margin expansion and bold global revenue bets. One surprising lever is a future price-to-earnings multiple that is even higher than much of its industry. Click to see exactly how analysts think it will all add up.

Result: Fair Value of $72.71 (UNDERVALUED)

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

However, elevated cocoa costs and ongoing softness in key emerging markets could undermine these optimistic projections if conditions fail to stabilize in the near term.

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

Build Your Own Mondelez International Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can easily shape your own view of Mondelez International in under three minutes with Do it your way.

A great starting point for your Mondelez International research is our analysis highlighting 2 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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