Mondelez’s 4Q Profit Beats Analysts’ Estimates; Street Is Bullish

Mondelez International reported fourth-quarter revenues and earnings on Thursday that both topped analysts’ estimates. However, shares of the confectionery giant were down by about 2% in Thursday’s extended market trading.

Mondelez’s (MDLZ) 4Q earnings of $0.67 compared favorably to analysts’ expectations of $0.66. Quarterly profit rose by 9.8% year-over-year, driven by higher operating margins, favorable income taxes, and an increase in equity investment earnings.

The company’s 4Q revenues of $7.3 billion increased 5.6% year-over-year and came above analysts’ forecasts of $7.16 billion. Organic sales grew 3.2% in the quarter, driven by volume and pricing, partially offset by unfavorable mix.

As for 2021, Mondelez expects organic revenue growth of over 3% and adjusted earnings growth in high single-digits on a constant currency basis, which is in-line with the company’s long-term growth targets. The company said that the currency translation would favorably impact 2021 net revenue growth by approximately 3% and adjusted earnings by $0.10 per share. (See Mondelez stock analysis on TipRanks)

Following the 4Q results, Jefferies analyst Robert Dickerson maintained a Buy rating and a price target of $66 (15.6% upside potential) on the stock. In a note to investors, the analyst said, “We saw no red flags and we continue to support the shares.”

Dickerson added that “In our view, MDLZ just needs to show the market that its end-market growth and share gains globally and strong cash position can in fact lead to better-than-algo growth driven by accretive cash allocation over the long haul.”

Overall, the Street has a firmly bullish outlook with a Strong Buy consensus rating based on 7 unanimous Buys. The average analyst price target of $65.43 implies upside potential of about 14.6% to current levels. Shares have gained 6.8% over the past year.

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