Mondelez (MDLZ): Evaluating Valuation After Recent 2% Share Price Dip

Mondelez International (MDLZ) has seen shares edge slightly lower in recent sessions, with a modest dip of 2% over the past day. Investors are now weighing how these moves fit into the company’s overall performance this year.

See our latest analysis for Mondelez International.

While Mondelez’s share price has slipped in the short term, its year-to-date share price return remains positive, which hints at some underlying resilience. Looking further out, the company’s one-year total shareholder return is slightly negative. This suggests recent momentum is fading compared to its longer-term performance.

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With shares still trading well below analyst targets and robust growth in both revenue and net income, investors may wonder whether Mondelez is currently undervalued or if the market has already factored in its future prospects.

Most Popular Narrative: 16% Undervalued

Mondelez’s latest fair value estimate of $73.67 stands well above its last close of $61.78, suggesting room for upside despite recent turbulence. The most widely followed narrative contends that pricing power, brand innovation, and global expansion lay the groundwork for stronger performance ahead.

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. Mondelez’s focus on innovative brand activations and product collaborations, like the Oreo and Post Malone partnership and Cadbury Dairy Milk with Lotus Bakeries, are expected to enhance consumer engagement and drive revenue growth.

Read the complete narrative.

Curious what assumptions fuel this narrative? The story hangs on optimistic forecasts for margins, relentless revenue expansion, and aggressive share buybacks. Which of these financial levers turns the gears on that eye-catching price target? Dive in to see how the numbers add up.

Result: Fair Value of $73.67 (UNDERVALUED)

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

However, rising cocoa costs and slowing sales in Europe could hinder Mondelez’s growth trajectory and cast doubt on the current valuation case.

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

Another View: What Do Earnings Ratios Say?

Shifting from fair value models to a simple earnings ratio, Mondelez trades at 22 times earnings, making it pricier than the US Food industry average of 18 and the peer average of 20.1. However, our fair ratio suggests a comparable value at 23.4. Does this premium signal investor optimism, or point to valuation risk if growth falters?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Mondelez International Narrative

Feel free to dig into the numbers yourself and carve out a different perspective. Building your own view can take just a few minutes, so 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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