Are Mondelez Shares Poised for a Comeback After Recent Emerging Market Investments?

• Wondering if Mondelez International is a hidden gem or already fully priced? Here is a closer look at what makes this stock worth considering.

• The shares have declined 8.7% over the last year, while a modest 1.0% gain in the last week points to a potential shift in sentiment or a period of stability.

• Recent headlines have highlighted Mondelez’s strategic investments in emerging markets and ongoing sustainability initiatives, indicating that management is actively pursuing new opportunities. These developments are leading to renewed analyst interest and are helping to shape investor expectations regarding growth and long-term risk.

• According to our valuation analysis, Mondelez scores a 4 out of 6 for being undervalued. This suggests it outperforms many of its peers, though it may not be the clear bargain that some investors seek. Before relying only on traditional valuation metrics, it is useful to review the company’s strengths, areas for improvement, and smarter approaches to identifying value, which will be discussed later in this article.

Mondelez International delivered -8.7% returns over the last year. See how this stacks up to the rest of the Food industry.

A Discounted Cash Flow (DCF) model estimates the fair value of a company by projecting its future free cash flows and discounting them back to today’s dollars. This approach helps investors determine whether a stock is undervalued or overvalued based on the business’s ability to generate cash over time.

For Mondelez International, the DCF analysis uses a 2 Stage Free Cash Flow to Equity model. The company’s latest twelve months free cash flow stands at $2.31 billion. Analyst expectations suggest that free cash flow will steadily rise over the next decade, reaching $4.94 billion by the end of 2028. Further out, projections continue to show moderate growth, with discounted values indicating a consistent upward trend.

Based on these forecasts, the estimated intrinsic value for Mondelez International shares is $113.95. This represents a 49.5% discount to the current market price, signaling that the stock may be significantly undervalued according to this model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Mondelez International is undervalued by 49.5%. Track this in your watchlist or portfolio, or discover 920 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mondelez International.

The Price-to-Earnings (PE) ratio is a widely used metric for valuing companies that are solidly profitable, like Mondelez International. It tells investors how much they are paying for each dollar of earnings and is especially meaningful for established companies with strong and consistent profits.

What counts as a “normal” or “fair” PE ratio can vary. Faster-growing companies or those carrying lower risk often command higher multiples, while slower growth or greater uncertainty can bring the valuation down. Comparing these multiples to industry averages gives some context, but it is just the starting point.

Currently, Mondelez trades on a PE ratio of 21.0x, directly in line with the Food industry average of 21.0x and just above the peer group’s 20.7x. Simply Wall St’s Fair Ratio, a proprietary measure that considers factors such as Mondelez’s earnings growth, profit margins, market cap, industry trends, and company-specific risks, currently stands at 22.1x. This offers a more tailored benchmark, reducing much of the “noise” found when only comparing peers or the broad industry.

Since Mondelez’s PE ratio of 21.0x is very close to its Fair Ratio of 22.1x, the stock appears to be fairly valued based on this approach.

Result: ABOUT RIGHT

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Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is an investment story that connects your expectations about a company, such as its future revenue, profit margins, and fair value, directly to its real-world outlook. Narratives allow you to explain your view on what drives Mondelez International’s value, turning raw financial numbers into a living forecast rooted in your own perspective. Narratives on Simply Wall St’s Community page make this easy and accessible for everyone, whether you are new or experienced, by providing a space for millions of investors to share and refine their outlooks.

Using Narratives, you can make clearer buy or sell decisions by instantly comparing your calculated Fair Value to today’s share price. Because these Narratives auto-update with major news, earnings, or industry changes, they stay relevant in real time. For example, one investor might expect Mondelez’s global pricing strategy and emerging market growth to support a fair value as high as $88.00, while a more cautious investor could see risks in commodity costs and set their narrative at $67.00. Narratives empower you to back up your own investment decisions with transparent, dynamic forecasts that reflect both what you believe and what is happening in the market.

Do you think there’s more to the story for Mondelez International? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MDLZ.

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