Mondelez International, Inc. (NASDAQ: MDLZ)

Mondelez International, Inc. is a snack company. Its core business is making and selling chocolate, biscuits, and baked snacks.

Recommendation Rationale – Sell at USD 75.07

• In Q2 FY 2024, MDLZ’s net revenues declined 1.9% as organic net revenue growth of 2.5% was more than offset by unfavorable currency-related items as well as the impact of the 2023 divestiture of the developed market gum business. Also, its gross profitdecreased $557 Mn, and gross profit margin decreased 590 basis points to 33.5%.
• Also, the commodity and other input prices are volatile and could increase or decrease significantly or availability of commodities might get constrained.
• The weakness in macroeconomic conditions in the company’s markets, including as a result of inflation, could impact its broader business.
• MDLZ’s share price is trading near to the R1 level recommended on July 16, 2024. Therefore, there can be a possible decline from the specified resistance levels.

MDLZ’s Daily Price Chart

MDLZ Daily Technical Chart, Data Source: REFINITIV

Fundamental Valuation:

P/E Based Relative Valuation

The company is exposed to risks such as geopolitical uncertainty, weakness in consumer spending or changes in consumer preferences and demand, etc. Therefore, the company’s stock might trade at slight discount to the peers’ average. Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to book profit at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD 75.07 per share, down by 0.27% as on 5^th September 2024.

Mondelez International, Inc. (NASDAQ: MDLZ) is a part of “Kalkine’s Global Primary Portfolio.”

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 5 September 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.