MDLZ

Based on the provided data, here is a comprehensive analysis of Mondelez International (MDLZ).

Technical Analysis MDLZ is in a pronounced technical downtrend, having significantly underperformed the broader market and trading near its 52-week low. The stock appears oversold, which suggests that much of the negative news may already be priced in. However, the trend remains weak, and a definitive reversal signal has yet to emerge.

Fundamental Analysis The company presents a mixed fundamental picture. While Q3 revenue growth was robust, it came at the cost of substantial margin compression, indicating potential pricing pressures or rising input costs. Financially, the company is healthy with moderate leverage and strong interest coverage, but its operational efficiency, reflected in low ROE and asset turnover, is only modest.

Valuation Valuation metrics are a key area of concern. While the P/E ratios seem reasonable, the extremely high PEG ratio of 9.48 signals that the stock's price is not justified by its growth prospects. The PB and PS ratios also appear elevated for the consumer staples sector, suggesting the stock is not cheap despite its recent decline.

Risk Assessment MDLZ carries relatively low volatility risk due to its low beta and defensive sector. The moderate drawdown and low short interest indicate manageable downside risk from these factors. The primary risks are fundamental – specifically, the company's ability to restore its profit margins in the face of economic pressures.

Investment Recommendation

MDLZ is a high-quality company in a defensive sector, but its current investment case is challenged. The significant margin pressure and an valuation that appears stretched relative to its growth outlook are major headwinds. While the oversold technical condition might offer a short-term bounce, a sustainable recovery is contingent on improved profitability. For now, investors may find better risk-reward opportunities elsewhere in the market. This analysis is for reference only and not investment advice.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, here is a 12-month outlook for Mondelez International (MDLZ):

12-Month Outlook for MDLZ

The primary catalyst for MDLZ over the next year will be its ability to demonstrate improvement in profit margins, showing it can effectively manage pricing and input costs to restore profitability after recent compression. The stock's oversold technical condition also provides a potential catalyst for a rebound if fundamentals stabilize. However, the key risk remains the stretched valuation, particularly the high PEG ratio, which suggests the current price may not be justified if margin recovery is slower than anticipated, potentially limiting upside. With an analyst target price of approximately $68.41, implying significant potential upside from the current $54.62, the outlook hinges on successful execution toward margin improvement; failure to achieve this could see the stock remain range-bound.

Wall Street Consensus

Most Wall Street analysts are optimistic about MDLZ's 12-month outlook, with consensus target around $68.41, indicating expected upside potential.

Overall, MDLZ has investment potential but also faces challenges. Here are key factors to weigh before investing.

MDLZ has demonstrated weak overall performance with significant recent declines and underperformance relative to the broader market.

Over the past one and three months, MDLZ has declined 2.79% and 13.73% respectively, substantially underperforming the market by 18.13% during the three-month period despite its low beta of 0.397 indicating typically lower volatility. The stock currently trades near its 52-week low of $53.13, just 2.8% above this support level and approximately 23% below its 52-week high of $71.15. Given the proximity to yearly lows and the maximum drawdown of -23.36%, MDLZ appears oversold from a technical perspective.

Revenue & Profitability: MDLZ showed strong revenue growth with Q3 revenue reaching $9.74 billion, up 8.5% from Q2's $8.98 billion. However, profitability metrics weakened significantly as gross profit margin declined from 32.7% to 26.8% and operating margin dropped from 13.0% to 7.6%, indicating considerable margin pressure despite top-line growth.

Financial Health: The company maintains moderate leverage with a debt ratio of 30.7% and debt-to-equity of 83.8%, supported by strong interest coverage of 33.8x. Cash position appears light with a cash ratio of just 0.06, though the negative cash conversion cycle of -13.8 days provides some working capital efficiency.

Operational Efficiency: MDLZ demonstrates modest operational metrics with ROE at 2.8% and asset turnover of 0.14, reflecting moderate capital utilization. The company's operating cycle of 113 days shows reasonable inventory and receivables management, while the 64-day inventory turnover suggests adequate stock management in the current environment.

MDLZ's valuation metrics present a mixed picture. The trailing PE ratio of 20.5 is in a reasonable range for a stable consumer staples company, supported by a lower forward PE of 17.3 suggesting anticipated earnings growth. However, the alarmingly high PEG ratio of 9.48 indicates the stock's price is not well-supported by its growth prospects, signaling potential overvaluation despite seemingly moderate earnings multiples. The PB ratio of 2.7 and PS ratio of 1.9 appear elevated for this sector, while the EV/EBITDA of 16.2 suggests a premium enterprise valuation.

Without industry average data for direct comparison, a definitive peer assessment cannot be provided. For a comprehensive valuation analysis of MDLZ, industry benchmark data for consumer packaged goods companies would be required to properly contextualize these ratios against sector norms. The current metrics alone suggest caution given the significant disconnect between price and growth expectations reflected in the elevated PEG ratio.

Volatility risk for MDLZ appears relatively low, given its beta of 0.397 indicates it is significantly less volatile than the broader market. The 1-year maximum drawdown of -23.36% is moderate for a large-cap stock, suggesting periods of meaningful decline can occur, albeit cushioned by the stock's defensive characteristics owing to the consumer staples sector.

Other risks include modest short interest at 3.01%, which implies limited speculative pressure for a sharp decline from a short squeeze but also indicates a lack of elevated negative sentiment. Liquidity is generally strong due to MDLZ's large market capitalization, reducing transaction cost risk for investors.