Market Overview

New CEO Sweetens Mondelez Outlook, Societe Generale Upgrades To Buy

Share:
New CEO Sweetens Mondelez Outlook, Societe Generale Upgrades To Buy

Mondelez International Inc (NASDAQ: MDLZ) reported in-line earnings this week with 2.4-percent organic sales growth and 21-percent earnings per share growth.

The resulting 4.8-percent value boost remains largely intact — and there's room for more upside, according to a Societe Generale analyst.

The Rating

Societe Generale analyst Warren Ackerman upgraded Mondelez from Hold to Buy and increased the price target from $45 to $55.

The Thesis

The upgrade was partly inspired by new CEO Dirk Van de Put’s strategic review, Ackerman said. (See the analyst's track record here.) 

Societe Generale anticipates four possible outcomes from the review:

  • An exit from direct store distribution.
  • A 20-percent margin target.
  • A sale of the cheese business.
  • An increase in advertising and commercial investments.

Since Mondelez will be under relatively new leadership at the time of the review presentation, Ackerman said he expects pursuit of the least difficult option — heightened ad support — with flexibility to pursue more aggressive strategies in the mid-term.

Mondelez' changing story in emerging markets — where the snack company saw 6.3-percent increases last quarter across Brazil, Russia, India and China — is encouraging, Ackerman said. 

“North America issues in biscuits continue but categories and execution are improving, and innovation for FY18 is in place,” he said, noting that the worst of the region’s issues appear to be over.

Societe Generale values Mondelez at a 10-percent premium to global staples.

Price Action

At the time of publication, shares were trading up 0.46 percent at $46.08. 

Related Links:

Mondelez Proves It’s Still A Worthy Investment

Mondelez Has A Buying Opportunity Around $40, Recent Weakness An Overreaction

Latest Ratings for MDLZ

DateFirmActionFromTo
Jan 2021Credit SuisseMaintainsOutperform
Jan 2021Deutsche BankMaintainsBuy
Nov 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for MDLZ
View the Latest Analyst Ratings

 

Related Articles (MDLZ)

View Comments and Join the Discussion!

Posted-In: Dirk Van de Put Societe Generale Warren AckermanAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
WKHSRoth CapitalMaintains15.0
HCKTRoth CapitalMaintains22.0
ARECRoth CapitalInitiates Coverage On7.5
SLABWells FargoMaintains180.0
PENWells FargoMaintains310.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com