Deutsche Bank Upgrades Mondelez, Says 'Striking A Better Balance'

In a report published Thursday, analysts at Deutsche Bank upgraded Mondelez International Inc MDLZ from Hold to Buy. The price target was raised from $36 to $43. The analysts expect the company to focus on share gains and category growth going forward, while also working to improve margins. Mondelez has reported its 1Q15 EPS ahead of the estimates, while its global snack and confection business seems to be improving. The company's market share has also stabilized and the management "appears set to better balance between top line vs. margin expansion," the analysts said. Although the company's FCF is currently weak, it is likely to have bottomed and the analysts expect select asset sales to offset any weakness. In addition, given that Mondelez's margin goals appear on track, Deutsche Bank has raised its EPS estimates for the company for 2015 and 2016. The analysts also expect the company to witness improved operating results, with lower structuring costs and capex in 2016.