Analysts remain upbeat
The majority of analysts covering Mondelēz (MDLZ) stock maintained a “buy” rating after its second-quarter results. Mondelēz’s organic sales marked healthy growth on the back of improved volumes and pricing. The company’s margins expanded—a big positive—both YoY (year-over-year) and sequentially. Mondelēz sustained its strong EPS growth momentum.
Going forward, Mondelēz’s organic sales are projected to improve, led by strong growth in its power brands and increases in emerging markets. Innovation-led products are gaining traction, which is expected to support its sales growth rate going forward.
However, the company missed analysts’ sales expectations. So, we remain a bit cautious on the net sales front as weakness in Brazil and the Middle East, as well as adverse currency rates, could restrict its sales growth rate.
Mondelēz’s margins are expected to expand going forward, led by productivity and cost savings coupled with volume leverage. Its earnings are expected to mark double-digit growth on a constant currency basis.
Ratings and target price
Among the 22 analysts providing recommendations on Mondelēz stock, 17 analysts maintain a “buy” rating and five analysts maintain a “hold.” Analysts have a target price of $48.55 per share in Mondelēz stock, which implies an upside potential of 17.0% based on its closing price of $41.50 on July 25.
Alongside Mondelēz, most of the analysts also recommend “buy” ratings on Conagra Brands (CAG) and Kraft Heinz (KHC) stock. They maintain “neutral” recommendations on Kellogg (K), Hershey (HSY), General Mills (GIS), and J.M. Smucker (SJM) stock.