Sweet Success: Mondelez Rides High On Tasty Growth Drivers, Analyst Boost Price Target

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• Mizuho analyst John J. Baumgartner reiterated a Buy rating on Mondelez International MDLZ, raising the price target to $86 from $78.
• The analyst considers the stock a top pick, as the drivers of share gains show no signs of abating.
• The key drivers are: new distribution growth across channels and regional tiers, innovation rapidly expanding from chocobakery to new categories (cheesecakes, ice cream, and pastries); and high-return investments, the analyst notes.
• Baumgartner applauds numerous potential upside drivers in FY23, including more margin recovery in Europe, supply chain/promotion/volume improvements in North America, and distribution/innovation gains in LatAm and AMEA.
• The analyst notes that emerging markets also remained a material growth driver and the primary reason behind the positive revision to FY23 revenue guidance.
• Based on the above, the analyst increased FY23 guidance for organic sales to +11.4% Y/Y (pricing +10.1%, vol/mix +1.3%) vs. prior expectation of +7%. FY23 adjusted EPS is expected to be $3.14 vs. prior estimate of $3.09.
• Price Action: MDLZ shares are trading higher by 0.86% at $77.38 on the last check Monday.
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