Mondelez International, Inc. (MDLZ), headquartered in Chicago, Illinois, is a global leader in the snack food industry. With a market cap of $86.9 billion, this powerhouse dominates the market with its iconic brands and innovative approach to delivering snacks loved by consumers worldwide.
Companies worth $10 billion or more are generally described as “large-cap stocks,” Mondelez epitomizes this distinction. With a global footprint spanning over 150 countries and a portfolio of beloved brands like Oreo, Cadbury, and Ritz, Mondelez has established itself as a cornerstone of the snack food industry.
Mondelez is down 15.9% from its 52-week high of $77.20, achieved on Feb. 2. MDLZ declined 8.2% over the three months, underperforming the broader Nasdaq Composite’s ($NASX) 9.7% gain during the same time frame.
Over the long term, MDLZ has plunged 10.3% on a YTD basis, and the shares have dropped 7.8% over the past 52 weeks. In comparison, the NASX gained 28% in 2024 and 34.8% over the past year.
To confirm the recent bearish trend, MDLZ has traded below its 50-day moving average since early October and below its 200-day moving average since late October.
On Oct. 29, Mondelez International delivered mixed Q3 results, with the stock registering a modest gain post-earnings. Revenue met expectations at $9.20 billion, reflecting a 1.9% year-over-year increase, while adjusted EPS of $0.99 outperformed consensus estimates by 16.6%.
However, organic revenue grew 5.4%, signaling a slowdown from the 15.7% growth in the same quarter last year. Margins faced headwinds, as gross margin declined to 32.6% from 38.7%, and operating margin fell to 12.5% from 15.3%. Free cash flow was a notable concern, swinging to a negative $343 million compared to $892 million a year ago. Despite these challenges, Mondelez reaffirmed its 2024 guidance, projecting high single-digit EPS growth and over $3.5 billion in free cash flow, signaling confidence in its strategic direction.
Mondelez International's competitor, Hershey Company (HSY), has delivered stronger performance relative to MDLZ over the past year despite challenges. Over the past 52 weeks, HSY stock has declined by 5.2% and is down 5.3% on a YTD basis.
Despite Mondelez International's recent underperformance relative to the broader sector, analysts remain optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from 22 analysts in coverage, and the mean price target of $80.77 is a premium of 24.4% from the current price levels.
