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On Wednesday, BofA Securities analyst Bryan Spillane updated the financial outlook for Mondelez International (NASDAQ:MDLZ), increasing the price target to $75.00 from the previous $73.00 while reiterating a Buy rating on the stock. The snack giant, currently trading at $65.65 with a market capitalization of $85 billion, is considered slightly undervalued according to InvestingPro analysis. This adjustment comes after Mondelez reported first-quarter earnings for the year 2025, with an adjusted earnings per share (EPS) of $0.74, surpassing the BofA estimate of $0.59. The company’s trailing twelve-month revenue stands at $36.46 billion, with a P/E ratio of 19.2x and an attractive dividend yield of 2.86%. InvestingPro subscribers can access over 30 additional financial metrics and exclusive ProTips for deeper analysis.
The beat in earnings was attributed to stronger gross and operating margins. However, organic sales growth of 3.1% was slightly below the BofA revised forecast of 3.3% and did not meet the company’s full-year organic sales guidance for 2025, which is around 5%. The company maintains a GOOD overall Financial Health Score of 2.7 on InvestingPro, with particularly strong profitability metrics. For comprehensive insights, investors can access the detailed Pro Research Report, available for over 1,400 US stocks. Sales fell short of expectations in three out of four regions, with North America being the most notable. In contrast, Europe experienced significant pricing benefits that exceeded the firm’s predictions, contributing to the overall earnings success.
Mondelez’s performance in the chocolate segment, particularly in Europe which is its largest market, showed better-than-expected elasticity, even when considering the shift of Easter timing to the second quarter. The updated adjusted EPS guidance now implies an EPS of $3.02, up from the prior forecast of $2.90. This revision reflects favorable foreign exchange (FX) movements, which have shifted from a predicted $0.12 drag on the year to a neutral impact on EPS, and also includes the effects of tariff changes, including those related to USMCA compliance.
The first-quarter earnings upside, according to Spillane, is likely to be redistributed throughout the year, primarily affecting the fourth quarter projections. The positive FX impact has led to an increase in EPS estimates for the years 2025-2027 by $0.12. The new price objective of $75 is still based on a multiple of 23.5 times the estimated calendar year 2026 EPS. Spillane’s analysis supports the continuation of a Buy rating for Mondelez stock.
In other recent news, Mondelez International reported a 3.1% increase in organic net revenue for the first quarter of 2025, despite a decline in volume mix and an 18% drop in earnings per share (EPS) in constant currency. The company generated $800 million in free cash flow and highlighted significant growth in its chocolate segment, which saw a 10.1% increase. Mondelez reaffirmed its 2025 outlook, expecting approximately 5% revenue growth with no impact from foreign currency fluctuations. In a separate development, Evercore ISI raised its price target for Mondelez shares from $70.00 to $73.00, maintaining an Outperform rating. The firm cited foreign exchange benefits and Mondelez’s capability to manage high cocoa costs as factors for higher EPS projections for 2025 and 2026. If cocoa futures stabilize, Mondelez could see a year-over-year decrease in costs, potentially boosting EPS growth. The analysts estimate a $3.32 EPS for 2026, compared to the consensus estimate of $3.24. These recent developments suggest that Mondelez is navigating its challenges effectively, with strategic pricing and cost management playing key roles.
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