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Mondelez Stock Trading Above 200 & 50-Day SMA: How to Play Ahead?
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Mondelez International, Inc. (MDLZ - Free Report) has demonstrated impressive upward momentum, consistently trading above its 200-day and 50-day simple moving averages (SMA), key indicators of price stability and long-term bullish trends. As of Monday, MDLZ was trading at $74.57, which surpassed both its 200-day SMA of $70.07 and 50-day SMA of $70.71, highlighting a continued uptrend.
SMA is a key tool in technical analysis used to assess price trends by smoothing out short-term fluctuations, offering a clearer view of the stock's longer-term direction. This technical strength, along with the stock's sustained momentum, reflects positive market sentiment and investor confidence in Mondelez’s financial health and growth prospects.
Shares of Mondelez have seen a 9.9% jump in the past three months compared with the industry’s growth of 6.8%. The company outpaced the broader Consumer Staples sector's 6.6% increase and the S&P 500 Index's 3.8% rise over the said period.
Image Source: Zacks Investment Research
What’s Driving MDLZ’s Performance?
A focus on core categories has been driving Mondelez’s growth. The company focuses on core categories such as chocolate, biscuits and baked snacks, which have demonstrated resilience during economic downturns. This was witnessed in the second quarter of 2024, wherein MDLZ’s core categories of chocolate, biscuits and baked snacks showed strong loyalty and volume resilience even amid challenging market conditions. The company is on track to generate around 90% of its revenues through these categories by 2030.
In the second quarter, the Biscuits and Baked Snacks increased 0.8%, and the chocolate category registered sales growth of 5.6%. Volume in seasonal chocolate was up 0.6% on a year-to-date basis, backed by the performance of seasonal shapes, novelties and bite-sized products. Snacking category consumers remain extremely loyal to the brands they love. Management has been focused on expanding its chocolate, biscuit and baked snacks categories as they present opportunities for solid growth and profitability.
Mondelez has been keen on reshaping its portfolio through prudent acquisitions and divestitures. Some of its recent acquisitions include Ricolino (concluded in the third quarter of 2022), Clif Bar (August 2022) and Chipita S.A. business (January 2022). MDLZ’s recent strategic partnership with Lotus Bakeries to co-develop new chocolate products and expand into India is a significant move to scale its business in emerging markets. The company plans to launch its first co-branded products with Lotus Bakeries in Europe in early 2025. This alliance aligns with its long-term growth strategies in chocolate and biscuits.
MDLZ Benefits From Organic Sales Growth
Mondelez has been benefiting from strength in its organic net revenues, which jumped 4.7% in the second quarter of 2024. Favorable pricing (up 4.7 percentage points or pp) contributed to organic net revenues. By focusing on core categories, enhancing brand appeal, prioritizing operational efficiency and cost management and empowering team members, Mondelez is poised to deliver strong performance for years to come. Mondelez is also making investments aimed at empowering consumers to make careful snacking decisions that align with their health-conscious and active lifestyles.
The company expects 2024 organic net revenue growth in the upper range of 3-5%. This reflects the impacts of completing price negotiations in Europe and improvement in North America. It remains on track with its pricing strategies and revenue growth management to counter input cost inflation. Mondelez envisions high-single-digit adjusted earnings per share (EPS) growth on a constant currency basis.
Challenges Faced by Mondelez
Mondelez is navigating a challenging and evolving operating landscape marked by rising input costs, inflation and consumer uncertainty across various regions. In North America, some consumers are focused on choosing snack options that align with their overall budget, while others are prioritizing convenience by selecting multipacks that offer better value and variety. Mondelez addresses this diverse demand for different price points and packaging sizes through its well-established price-pack architecture, enabling it to cater to a wide range of consumer preferences.
Cost inflation, particularly in the chocolate segment due to surging cocoa prices, has been a persistent issue for Mondelez. While the company has managed to mitigate some of these pressures through price increases and lower manufacturing costs, its adjusted gross margin in the second quarter of 2024 was still impacted by higher raw material and transportation expenses. The adjusted operating margin was partly affected by input cost inflation and increased spending on advertising and consumer promotions. MDLZ anticipates that elevated cocoa prices will remain a significant headwind in the second half of 2024.
How to Play MDLZ Stock?
Mondelez is well-positioned for growth, supported by its strategic pricing initiatives, disciplined cost control and a strong focus on resilient core categories such as chocolate and biscuits. The company's portfolio-strengthening moves, including partnerships like the one with Lotus Bakeries, present promising opportunities.
However, persistent challenges, including rising cocoa prices and inflationary pressures, could weigh on margins in the near term, limiting upside potential. Given the current environment, existing investors may want to hold their positions, while prospective investors might consider waiting for a more favorable entry point. Mondelez currently carries a Zacks Rank #3 (Hold).
CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal-year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Flowers Foods (FLO - Free Report) , a packaged bakery food company, currently carries a Zacks Rank #2 (Buy). FLO has a trailing four-quarter earnings surprise of 1.9%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings implies growth of around 1% and 5%, respectively, from the year-ago reported numbers.
McCormick (MKC - Free Report) is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for McCormick & Company’s current fiscal-year sales and earnings indicates advancements of 0.1% and 5.6%, respectively, from the year-ago reported figures. MKC has a trailing four-quarter earnings surprise of 8.3%, on average.
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Mondelez Stock Trading Above 200 & 50-Day SMA: How to Play Ahead?
Mondelez International, Inc. (MDLZ - Free Report) has demonstrated impressive upward momentum, consistently trading above its 200-day and 50-day simple moving averages (SMA), key indicators of price stability and long-term bullish trends. As of Monday, MDLZ was trading at $74.57, which surpassed both its 200-day SMA of $70.07 and 50-day SMA of $70.71, highlighting a continued uptrend.
SMA is a key tool in technical analysis used to assess price trends by smoothing out short-term fluctuations, offering a clearer view of the stock's longer-term direction. This technical strength, along with the stock's sustained momentum, reflects positive market sentiment and investor confidence in Mondelez’s financial health and growth prospects.
Shares of Mondelez have seen a 9.9% jump in the past three months compared with the industry’s growth of 6.8%. The company outpaced the broader Consumer Staples sector's 6.6% increase and the S&P 500 Index's 3.8% rise over the said period.
Image Source: Zacks Investment Research
What’s Driving MDLZ’s Performance?
A focus on core categories has been driving Mondelez’s growth. The company focuses on core categories such as chocolate, biscuits and baked snacks, which have demonstrated resilience during economic downturns. This was witnessed in the second quarter of 2024, wherein MDLZ’s core categories of chocolate, biscuits and baked snacks showed strong loyalty and volume resilience even amid challenging market conditions. The company is on track to generate around 90% of its revenues through these categories by 2030.
In the second quarter, the Biscuits and Baked Snacks increased 0.8%, and the chocolate category registered sales growth of 5.6%. Volume in seasonal chocolate was up 0.6% on a year-to-date basis, backed by the performance of seasonal shapes, novelties and bite-sized products. Snacking category consumers remain extremely loyal to the brands they love. Management has been focused on expanding its chocolate, biscuit and baked snacks categories as they present opportunities for solid growth and profitability.
Mondelez has been keen on reshaping its portfolio through prudent acquisitions and divestitures. Some of its recent acquisitions include Ricolino (concluded in the third quarter of 2022), Clif Bar (August 2022) and Chipita S.A. business (January 2022). MDLZ’s recent strategic partnership with Lotus Bakeries to co-develop new chocolate products and expand into India is a significant move to scale its business in emerging markets. The company plans to launch its first co-branded products with Lotus Bakeries in Europe in early 2025. This alliance aligns with its long-term growth strategies in chocolate and biscuits.
MDLZ Benefits From Organic Sales Growth
Mondelez has been benefiting from strength in its organic net revenues, which jumped 4.7% in the second quarter of 2024. Favorable pricing (up 4.7 percentage points or pp) contributed to organic net revenues. By focusing on core categories, enhancing brand appeal, prioritizing operational efficiency and cost management and empowering team members, Mondelez is poised to deliver strong performance for years to come. Mondelez is also making investments aimed at empowering consumers to make careful snacking decisions that align with their health-conscious and active lifestyles.
The company expects 2024 organic net revenue growth in the upper range of 3-5%. This reflects the impacts of completing price negotiations in Europe and improvement in North America. It remains on track with its pricing strategies and revenue growth management to counter input cost inflation. Mondelez envisions high-single-digit adjusted earnings per share (EPS) growth on a constant currency basis.
Challenges Faced by Mondelez
Mondelez is navigating a challenging and evolving operating landscape marked by rising input costs, inflation and consumer uncertainty across various regions. In North America, some consumers are focused on choosing snack options that align with their overall budget, while others are prioritizing convenience by selecting multipacks that offer better value and variety. Mondelez addresses this diverse demand for different price points and packaging sizes through its well-established price-pack architecture, enabling it to cater to a wide range of consumer preferences.
Cost inflation, particularly in the chocolate segment due to surging cocoa prices, has been a persistent issue for Mondelez. While the company has managed to mitigate some of these pressures through price increases and lower manufacturing costs, its adjusted gross margin in the second quarter of 2024 was still impacted by higher raw material and transportation expenses. The adjusted operating margin was partly affected by input cost inflation and increased spending on advertising and consumer promotions. MDLZ anticipates that elevated cocoa prices will remain a significant headwind in the second half of 2024.
How to Play MDLZ Stock?
Mondelez is well-positioned for growth, supported by its strategic pricing initiatives, disciplined cost control and a strong focus on resilient core categories such as chocolate and biscuits. The company's portfolio-strengthening moves, including partnerships like the one with Lotus Bakeries, present promising opportunities.
However, persistent challenges, including rising cocoa prices and inflationary pressures, could weigh on margins in the near term, limiting upside potential. Given the current environment, existing investors may want to hold their positions, while prospective investors might consider waiting for a more favorable entry point. Mondelez currently carries a Zacks Rank #3 (Hold).
3 Food Stocks Worth Betting On
The Chef’s Warehouse (CHEF - Free Report) , which engages in the distribution of specialty food products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal-year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Flowers Foods (FLO - Free Report) , a packaged bakery food company, currently carries a Zacks Rank #2 (Buy). FLO has a trailing four-quarter earnings surprise of 1.9%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings implies growth of around 1% and 5%, respectively, from the year-ago reported numbers.
McCormick (MKC - Free Report) is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for McCormick & Company’s current fiscal-year sales and earnings indicates advancements of 0.1% and 5.6%, respectively, from the year-ago reported figures. MKC has a trailing four-quarter earnings surprise of 8.3%, on average.