MDLZ Should I Buy
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Mondelez International Inc (MDLZ) is not a strong buy for a long-term beginner investor at this moment. The stock faces significant near-term challenges, including declining margins, softening volumes, and competitive pressures in key markets. While there is potential for recovery in the medium to long term, the current technical indicators, financial performance, and analyst sentiment suggest a cautious approach. Holding the stock or waiting for clearer signs of recovery would be more prudent.
The MACD is positive and expanding, indicating mild bullish momentum. However, the RSI is neutral, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5), suggesting the stock is in a downtrend. Key resistance levels are at 58.362 and 59.389, while support levels are at 55.039 and 54.012. The stock is trading near its pivot point of 56.7, showing limited upward momentum.
Falling cocoa prices could provide margin relief in the medium term. Analysts like Morgan Stanley and Wells Fargo highlight potential earnings recovery and above-average EPS growth into 2027.
Numerous near-term threats, including softening volumes, competition in European chocolate, and sluggish U.S. biscuit sales, are weighing on the stock. Financial performance in Q4 2025 showed a significant drop in net income (-61.89% YoY) and EPS (-60.77% YoY). Analyst downgrades, such as Rothschild & Co's recent downgrade to Neutral, highlight these challenges.
In Q4 2025, Mondelez reported a 9.29% YoY increase in revenue to $10.5 billion. However, net income dropped significantly by 61.89% YoY to $665 million, and EPS fell by 60.77% YoY to $0.51. Gross margin also declined sharply to 27.83%, down 27.22% YoY, indicating significant profitability challenges.
Analyst sentiment is mixed. Recent downgrades, such as Rothschild & Co's downgrade to Neutral with a price target of $55, highlight concerns about near-term threats and margin pressures. On the other hand, firms like Morgan Stanley and Wells Fargo maintain Overweight ratings with price targets in the $65-$70 range, citing potential recovery in earnings and EPS growth in the medium term.
