Mondelēz International Faces Cocoa Price Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy MDLZ?
Source: NASDAQ.COM
- Cocoa Price Retreat: After reaching historic highs in 2025, cocoa prices have retreated to normal levels; however, large buyers like Mondelēz, who hedge their purchases in advance, are not fully benefiting from these lower prices, creating a disconnect in near-term earnings expectations.
- Emerging Market Growth: Mondelēz generates 40% of its 2025 revenues from emerging markets, with a compound annual growth rate of 13.4% over the past five years, highlighting strong growth potential in countries like China, Brazil, and India.
- Stock Buyback Program: The company authorized a new $9 billion stock repurchase program in December 2024, replacing a previous $6 billion authorization, aimed at reducing share count to enhance per-share earnings and bolster investor confidence.
- Dividend Stability Risk: Although Mondelēz has raised its dividend for over a decade, with a current yield of approximately 3.4%, the payout ratio is expected to exceed 100% of earnings in the near term, posing a potential risk for income investors.
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Analyst Views on MDLZ
Wall Street analysts forecast MDLZ stock price to rise
18 Analyst Rating
13 Buy
5 Hold
0 Sell
Moderate Buy
Current: 57.250
Low
62.00
Averages
66.82
High
84.00
Current: 57.250
Low
62.00
Averages
66.82
High
84.00
About MDLZ
Mondelez International, Inc. is a snack company. The Company’s core business is making and selling chocolate, biscuits and baked snacks. The Company also has additional businesses in adjacent, locally relevant categories including gum and candy, cheese and grocery and powdered beverages. Its portfolio includes global and local brands such as Oreo, Ritz, LU, Clif Bar and Tate’s Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka and Toblerone chocolate. The Company’s segments include Latin America, AMEA, Europe and North America. It sells its products in over 150 countries and has operations in approximately 80 countries, including 147 principal manufacturing and processing facilities across 46 countries. It sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Mondelēz International Faces Cocoa Price Challenges
- Cocoa Price Retreat: After reaching historic highs in 2025, cocoa prices have retreated to normal levels; however, large buyers like Mondelēz, who hedge their purchases in advance, are not fully benefiting from these lower prices, creating a disconnect in near-term earnings expectations.
- Emerging Market Growth: Mondelēz generates 40% of its 2025 revenues from emerging markets, with a compound annual growth rate of 13.4% over the past five years, highlighting strong growth potential in countries like China, Brazil, and India.
- Stock Buyback Program: The company authorized a new $9 billion stock repurchase program in December 2024, replacing a previous $6 billion authorization, aimed at reducing share count to enhance per-share earnings and bolster investor confidence.
- Dividend Stability Risk: Although Mondelēz has raised its dividend for over a decade, with a current yield of approximately 3.4%, the payout ratio is expected to exceed 100% of earnings in the near term, posing a potential risk for income investors.
See More
Mondelēz International: Emerging Market Growth Potential
- Market Share Advantage: Mondelēz International holds a 17% share of the global biscuit market, with its Oreo brand commanding an 18% market share in China, highlighting its strong competitive position in the rapidly growing consumer goods sector.
- Shareholder Return Plan: The company authorized a new $9 billion stock repurchase program in December 2024, replacing the unspent $2.8 billion from the previous authorization, consistently reducing the share count to enhance per-share earnings and boost investor confidence.
- Emerging Market Growth: Annual revenues from China, Brazil, and India are approximately $2 billion, $1.8 billion, and $1.7 billion respectively, with growth rates surpassing those of developed markets, indicating successful market expansion strategies in these regions.
- Dividend Stability: Despite facing cocoa price inflation, Mondelēz maintains a quarterly dividend of $0.50 per share, having raised dividends annually for over a decade, demonstrating strong cash flow and commitment to shareholders.
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Mondelez International Upgraded to Overweight
- Rating Upgrade: Mondelez International (MDLZ) has received an upgrade to an overweight rating, indicating analysts' optimistic outlook on its future performance, which may attract more investor interest.
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- Market Reaction: This rating upgrade is likely to boost market confidence in Mondelez, potentially driving its stock price higher and strengthening the company's position in the competitive food industry.
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- Positive Catalysts for Alphabet: Citigroup adds a 90-day Catalyst Watch on Alphabet, expecting upcoming product updates during events like Google Cloud Next and YouTube Brandcast to drive stock price appreciation.
- Biogen Upgrade: Piper Sandler upgrades Biogen from Neutral to Overweight, raising the price target from $177 to $214, reflecting confidence in its growth potential moving forward.
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- Coverage Initiation: BTIG has initiated coverage on the food sector with Neutral ratings, as analyst Rob Dickerson highlighted that many companies are historically discounted due to concerns over demand, costs, and leverage, indicating market caution towards the sector.
- Pessimistic Outlook: Dickerson's team believes that valuations will remain depressed without improvements in core business demand, revenue growth, margin enhancement, and capital structure, reflecting market apprehension about future growth prospects.
- Stock Recommendations: BTIG has rated Mondelez (MDLZ), J.M. Smucker (SJM), and Utz Brands (UTZ) as Buy, citing their stronger defensive positions and cost advantages that could lead to better cash flow and profit growth in the current challenging operating environment.
- Market Dynamics Impact: Food and beverage stocks have slumped amid fuel price concerns, indicating a lack of overall market confidence in the food sector, while the forecasted GLP-1 usage hitting 15% of the U.S. population could have far-reaching implications for the industry.
See More
Mondelēz International Faces Cocoa Price Challenges
- Cocoa Price Retreat: After reaching historic highs in 2025, cocoa prices have retreated to normal levels; however, large buyers like Mondelēz, who hedge their purchases in advance, are not fully benefiting from these lower prices, creating a disconnect in near-term earnings expectations.
- Emerging Market Growth: Mondelēz generates 40% of its 2025 revenues from emerging markets, with a compound annual growth rate of 13.4% over the past five years, highlighting strong growth potential in countries like China, Brazil, and India.
- Stock Buyback Program: The company authorized a new $9 billion stock repurchase program in December 2024, replacing a previous $6 billion authorization, aimed at reducing share count to enhance per-share earnings and bolster investor confidence.
- Dividend Stability Risk: Although Mondelēz has raised its dividend for over a decade, with a current yield of approximately 3.4%, the payout ratio is expected to exceed 100% of earnings in the near term, posing a potential risk for income investors.
See More
Mondelēz International: Emerging Market Growth Potential
- Market Share Advantage: Mondelēz International holds a 17% share of the global biscuit market, with its Oreo brand commanding an 18% market share in China, highlighting its strong competitive position in the rapidly growing consumer goods sector.
- Shareholder Return Plan: The company authorized a new $9 billion stock repurchase program in December 2024, replacing the unspent $2.8 billion from the previous authorization, consistently reducing the share count to enhance per-share earnings and boost investor confidence.
- Emerging Market Growth: Annual revenues from China, Brazil, and India are approximately $2 billion, $1.8 billion, and $1.7 billion respectively, with growth rates surpassing those of developed markets, indicating successful market expansion strategies in these regions.
- Dividend Stability: Despite facing cocoa price inflation, Mondelēz maintains a quarterly dividend of $0.50 per share, having raised dividends annually for over a decade, demonstrating strong cash flow and commitment to shareholders.
See More
The Advantage of Buyback Stocks Amid Market Turbulence
- Market Volatility Strategy: Wolfe Research highlights that companies with consistent buybacks can offer investors a relatively safe investment option during turbulent market conditions, particularly as President Trump's threats against Iran escalate, contributing to a bearish market sentiment.
- Investment Potential of Lowe's: Lowe's is included in Wolfe's defensive stock basket, boasting a current dividend yield of approximately 2.1%, and despite a more than 4% decline in 2026, analysts are optimistic about its future, forecasting a 23% upside in its stock price.
- ADP's Competitive Edge: ADP, a payroll services provider, has raised its cash dividend for 51 consecutive years, with a current yield of 3.3%, and while concerns about AI disruption loom, analysts believe its unique advantages in compliance and data will support long-term growth.
- Diversity of Buyback Stocks: Wolfe's list also includes companies like Colgate-Palmolive, Illinois Tool Works, AO Smith, and Mondelez, all of which have consistently repurchased shares over the past decade, demonstrating resilience and attractiveness during economic slowdowns.
See More
Mondelez International Upgraded to Overweight
- Rating Upgrade: Mondelez International (MDLZ) has received an upgrade to an overweight rating, indicating analysts' optimistic outlook on its future performance, which may attract more investor interest.
- Price Target Set: Analysts have set a price target of $65.78, reflecting a positive expectation for the company's stock price, which could yield substantial returns for investors if achieved.
- Market Reaction: This rating upgrade is likely to boost market confidence in Mondelez, potentially driving its stock price higher and strengthening the company's position in the competitive food industry.
- Investor Strategy: With the rating increase, investors may reassess their portfolios and increase their holdings in Mondelez, aiming to benefit from the company's future market performance.
See More
