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On Monday, Berenberg raised the price target for Mondelez (NASDAQ:MDLZ) International shares to $81 from $77, while reiterating a Buy rating on the company’s stock. Currently trading at $67.75, Mondelez appears fairly valued according to InvestingPro analysis. The adjustment followed the release of Mondelez’s first-quarter results for the year 2025, which were announced on April 29.
The global snack company, with a market capitalization of $87.7 billion, reported organic growth of 3.1% in the first quarter, which was marginally lower than the anticipated 3.5%. This shortfall was attributed to a 3.5% decline in volume/mix, a steeper drop than the 1.2% consensus had estimated. On the other hand, Mondelez saw a notable increase in pricing, which rose to 6.6%, surpassing the consensus estimate of 4.8%. For deeper insights into Mondelez’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and expert research reports.
Mondelez management also detailed various factors impacting volume growth. These included a 0.6 percentage point (ppt) hit from U.S. destocking, a 0.9 ppt impact from downsizing, and a 0.7 ppt effect due to the timing of Easter. Conversely, the company experienced a positive impact of 0.7 ppt from reduced customer disruption in the European Union. Despite these challenges, the company maintains a healthy dividend yield of 2.77% and has delivered a strong year-to-date return of 14.22%.
Despite these challenges, Mondelez’s adjusted earnings before interest and taxes (EBIT) margins contracted by 360 basis points to 14.8%. This contraction led to a 20% decrease in adjusted EBIT, which came in at $1,375 million, outperforming the consensus forecast of $1,215 million. Adjusted earnings per share (EPS) also declined by 23% to $0.74, which was nonetheless higher than the consensus estimate of $0.66.
In light of these results, Mondelez’s management has confirmed that it will maintain its guidance for the full year 2025.
In other recent news, Mondelez International reported its first-quarter earnings for 2025, highlighting a 3.1% increase in organic net revenue. Despite a decline in volume mix and an 18% drop in earnings per share (EPS) on a constant currency basis, the company generated $800 million in free cash flow and reaffirmed its 2025 outlook, projecting approximately 5% revenue growth. Analysts from Stifel, BofA Securities, and Evercore ISI have responded positively to Mondelez’s performance, with Stifel and Evercore ISI raising their price targets to $73 and BofA increasing it to $75, all maintaining a Buy rating. Stifel noted Mondelez’s better-than-expected margin results amid significant cocoa inflation, while BofA attributed the earnings beat to stronger gross and operating margins. Evercore ISI highlighted Mondelez’s strategic pricing in Europe and successful management of high cocoa costs as key factors in its performance. Mondelez’s chocolate segment, particularly in Europe, showed significant growth, with elasticity performing better than anticipated. The company continues to navigate a challenging market environment, focusing on strategic pricing and managing input costs to maintain profitability.
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