Should Anticipated Lower Cocoa Costs Prompt a Fresh Look at Mondelez International's (MDLZ) Prospects?

• In recent days, Mondelez International reported that improved weather in West Africa has led to a cocoa pod count 7% above the five-year average, contributing to expectations for a larger upcoming cocoa harvest and likely lower input costs for chocolate makers.
• This positive crop outlook in Ivory Coast came despite Nigeria's expected production decline, highlighting how shifts in regional supply can influence global commodity costs for major food companies such as Mondelez.
• We'll explore how the expectation of reduced cocoa costs may alter the investment outlook for Mondelez International going forward.

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Mondelez International Investment Narrative Recap

To own Mondelez International stock, you need confidence in its ability to drive revenue through brand strength, global presence, and pricing power, even amid challenging input costs. The recent improvement in West African cocoa harvest projections offers short-term relief to input costs but does not fully offset the risk that persistently high cocoa prices pose to net margins, still the most important catalyst for recovery, and the central risk to profitability in the near term.

Among recent announcements, Mondelez’s reaffirmed 2025 guidance stands out: despite cocoa cost headwinds, management maintained outlooks for organic net revenue growth near 5%, though adjusted EPS is expected to decline. This move underscores the influence of commodity swings, like the positive Ivory Coast crop update, on financial forecasts and shows management’s focus on capital discipline and brand investment as they balance risk and opportunity.

However, while cocoa prices may ease, investors should be aware that margin pressure could persist if global supply shifts suddenly or consumer demand weakens in key markets...

Read the full narrative on Mondelez International (it's free!)

Mondelez International's outlook anticipates $42.7 billion in revenue and $4.7 billion in earnings by 2028. This scenario assumes a 4.8% annual revenue growth rate and an earnings increase of $1.1 billion from current earnings of $3.6 billion.

Uncover how Mondelez International's forecasts yield a $74.42 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provide fair value estimates for Mondelez stock from US$69.83 up to US$130.80, with four unique perspectives. As cocoa prices influence cost outlooks, consider how these different views reflect broader uncertainty around the company’s margins and long-term growth potential.

Explore 4 other fair value estimates on Mondelez International - why the stock might be worth just $69.83!

Build Your Own Mondelez International Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Mondelez International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Mondelez International's overall financial health at a glance.

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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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