Stifel's 'Increased Confidence' In Mondelez Prompts Price Target Lift

Stifel hosted Mondelez International Inc MDLZ CFO Luca Zaramella and IR Shep Dunlap for meetings with investors, which resulted in "increased confidence" in the company's ability to grow sales and profits.

The Analyst

Stifel's Christopher Growe maintains a Hold rating on Mondelez with a price target lifted from $48 to $52.

The Thesis

Mondelez's 90% product exposure to the snack category and 40% geographical exposure to emerging markets is "starting to shine through," Growe wrote in a note. Most notably, the company had a strong start to the fiscal year as it showed a nearly 3% category growth. The recent momentum gives management the benefit of the doubt to reinvest in the business, including new marketing/promotion, whitespace expansion, and product improvements

Growe said management's focus on the business is likely to sustain a growth rate that is inline with the category's growth at 3%. Encouragingly, this would make Mondelez a leader within the food industry in terms of growth and could prompt management to lift its sales growth beyond the current 2% to 3%.

If management were to lift its sales growth outlook beyond 3%, Growe said it would be viewed positively by investors and warrant a continued premium multiple.

Price Action

Shares of Mondelez were trading around $54.79 Monday afternoon.

Related Links:

UBS Lifts Mondelez International Price Target Ahead Of Q1 Print

Mondelez CEO Talks State Of Snack Market With CNBC