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Investing.com - Berenberg downgraded Mondelez International (NASDAQ:MDLZ) from Buy to Hold on Thursday, while reducing its price target to $70.00 from $81.00. The stock, currently trading at $63.14, sits well below its 52-week high of $72.97, with a market capitalization of $81.7 billion. According to InvestingPro analysis, the company appears overvalued at current levels.
The downgrade reflects deteriorating near-term trends for the snack food giant, with Berenberg noting that consensus estimates likely underestimate the scope of current headwinds facing the company. This comes as Mondelez shows mixed performance metrics, with revenue growth of 3.14% in the last twelve months and an overall "FAIR" financial health rating from InvestingPro’s comprehensive analysis system.
The research firm highlighted uncertain recovery in the U.S. consumer market, particularly in the mid-mass chocolate segment, as a key concern for Mondelez’s performance outlook.
European demand has weakened further according to Berenberg’s analysis, with the company facing increasing pressure from private label competitors in that region.
While Berenberg acknowledged that Mondelez’s downstream presence could be beneficial in a deflationary raw materials environment, it concluded that near-term challenges would likely cap any material upside potential over the next 12 months.
In other recent news, Mondelez International’s second-quarter earnings report has prompted Stifel to raise its price target to $76, maintaining a Buy rating. The company reported earnings per share of $0.73, which, despite being a 12% decline, exceeded Stifel’s expectations by $0.04 due to better revenue and reduced operating profit margin contraction. Evercore ISI has adjusted its price target for Mondelez to $72, citing concerns over higher price elasticity in Europe, which has led to a reduction in its third-quarter consolidated organic sales forecast to 3.5%, below the consensus estimate of 4.5%. Meanwhile, Bernstein has reiterated an Outperform rating with a price target of $88, noting limited downside and potential upside amidst cocoa market volatility. JPMorgan has assumed coverage with an Overweight rating, setting a price target of $75, and highlighted Mondelez’s global reach and focus on the snacking category as competitive advantages. Piper Sandler increased its price target to $67, maintaining a Neutral rating, and pointed to strong European Union pricing as a favorable factor, while identifying cocoa costs as crucial for future earnings growth. These developments reflect a range of analyst perspectives on Mondelez’s financial performance and market positioning.
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