On Monday, DA Davidson adjusted its outlook on Mondelez (NASDAQ:MDLZ) International (NASDAQ:MDLZ) shares, reducing the price target to $82.00 from the previous $87.00 while still recommending the stock as a Buy. The decision comes as the company faces a challenging fiscal year 2024, with various market pressures and disruptions anticipated.
The firm's stance on Mondelez remains positive, citing several reasons for favoring the snack manufacturer over its peer, Hershey, which currently holds a Neutral rating. Mondelez's advantages include a more diversified market presence, lower exposure to cocoa, and potential synergies expected to counterbalance some of the headwinds.
Despite a strong first quarter performance, DA Davidson acknowledges that the year ahead is likely to be less impressive for Mondelez by its own standards. The company is expected to encounter difficulties in the U.S. snacking sector, disruptions in other areas, and a somewhat weaker environment in emerging markets.
These factors have led to downward revisions in DA Davidson's estimates for the remainder of the fiscal year 2024, albeit marginally after considering the first quarter's earnings beat. The firm's revised target reflects these adjustments while maintaining a confident Buy rating on Mondelez shares.
InvestingPro Insights
Mondelez International (NASDAQ:MDLZ) shows a robust financial outlook according to recent data. With a market capitalization of $93.75 billion and a trailing twelve-month revenue of $36.14 billion, the company's financial health appears strong. The revenue growth of 9.85% over the last twelve months as of Q1 2024 indicates a positive trajectory in earnings, despite the various market pressures and disruptions anticipated for the fiscal year.
The adjusted P/E ratio of 17.64 is a metric that value investors may find appealing, as it suggests the stock could be undervalued relative to its earnings. Additionally, the company has demonstrated a solid gross profit margin of 41.69%, which is indicative of its ability to maintain profitability amid cost fluctuations. The dividend yield of 2.43% coupled with a dividend growth of 10.39% over the last twelve months as of Q1 2024 reflects the company's commitment to returning value to shareholders.
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