On Wednesday, Citi maintained its Buy rating on Mondelez (NASDAQ:MDLZ) International (NASDAQ:MDLZ) stock but reduced the shares target from $83.00 to $80.00.
The adjustment comes ahead of the company's second-quarter earnings report scheduled for July 30, 2024. The firm predicts that Mondelez's organic sales growth will be slightly below consensus expectations and anticipates earnings per share (EPS) to align with predictions.
The analyst from Citi indicated that Mondelez is likely to reiterate its guidance for both organic sales growth and EPS for the year 2024. However, there is a suggestion from the company that the pricing may not completely offset the inflation expected next year, which could lead to a downward revision of estimates for 2025 following the earnings announcement.
The upcoming quarterly report is seen as a potential moment to recalibrate multi-year expectations for Mondelez. According to the analyst's comments, this recalibration could ultimately prove advantageous for the stock beyond the second-quarter results.
Investors and market watchers are now looking forward to the earnings release at the end of July to assess Mondelez International's performance and the potential impact of the firm's pricing strategy against the backdrop of inflationary pressures. The current price target reflects a cautious yet optimistic stance on the company's ability to navigate the economic challenges ahead.
In other recent news, Mondelez International has seen adjustments in analyst outlooks and strategic developments. Deutsche Bank (ETR:DBKGn) revised their price target for Mondelez down to $75 from $78, while maintaining a Buy rating.
This comes following Mondelez's recent performance, which showed a roughly 7% underperformance compared to the Consumer Staples Select Sector SPDR Fund over the last three months. Jefferies and DA Davidson also lowered their price targets for Mondelez to $78 and $82 respectively, both retaining a Buy rating.
Mondelez issued CAD 650 million in senior notes due in 2031, a move expected to bolster the company's financial position. This issuance was part of a larger Registration Statement on Form S-3 filed with the Securities and Exchange Commission. In addition, the company announced a Canadian dollar-denominated offering of senior notes due in 2031, which is expected to close soon.
Mondelez also unveiled a new innovation hub in Singapore, backed by an investment of over $5 million. This facility is expected to enhance the company's product development capabilities in the Asia Pacific region, particularly in the biscuits and baked snacks category. These developments are part of the ongoing strategic initiatives shaping Mondelez's future.
InvestingPro Insights
As Mondelez International (NASDAQ:MDLZ) prepares to release its second-quarter earnings, investors may find the latest metrics from InvestingPro to be particularly illuminating. Mondelez's market capitalization stands at a solid $88.3 billion, indicating a robust presence in the market. The company's P/E ratio, a key indicator of its valuation, is currently at 20.7, with an adjusted P/E ratio for the last twelve months as of Q1 2024 at a slightly lower 16.61, suggesting a potentially more attractive valuation for investors considering long-term positions.
With a revenue growth of 9.85% for the last twelve months as of Q1 2024, Mondelez is showing a healthy expansion in its business activities. Additionally, the company has managed to maintain a strong gross profit margin of 41.69% during the same period, which could signal efficient operations and pricing power in the face of inflationary pressures. Moreover, a dividend yield of 2.58% paired with a dividend growth of 10.39% in the same timeframe could be appealing for income-focused investors.
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