Mondelez's Sugary Valuation Could Cause Wealth Decay
Stephen Simpson, CFA • 14 Comments
Stephen Simpson, CFA • 14 Comments
Yesterday, 11:05 AM
- Among consumer stocks covered by Susquehanna, the analysts say Mondelez (MDLZ -4.3%) and Coca-Cola European Partners (CCE -5.4%), along with Sodastream (SODA -2.7%), have the greatest earnings downside from a euro and pound that have gotten, well, pounded.
- The euro is currently down 2.3% against the dollar, while the pound is down 8.5%.
- "For those seeking to buy the dip, we would prefer MDLZ over CCE," the firm says, noting that 100% of CCE's revenues are exposed to those two currencies, it faces structural risks, and Coca-Cola's 48% ownership of CCE makes it an unlikely acquisition target.
- Acquisitive companies with U.S. dollar assets could go hunting in Europe, the analysts say, pointing to likely suitor Kraft Heinz (KHC -1.8%) -- a top pick for the firm, along with TreeHouse Foods (THS -0.6%) and Molson Coors (TAP -3.3%).
- Meanwhile, the possible ascendance of UKIP leader Nigel Farage in the UK or "anything that makes a Donald Trump presidency more likely" is bad for Mexico-heavy Constellation Brands (STZ -1.2%).
Wed, Apr. 27, 8:15 AM
- Mondelez International (NASDAQ:MDLZ) announces that organic revenue rose 2.1% in Q1. The gain consisted of a 2.8 percentage point impact from pricing to help offset the 70 bp volume/mix drag. Sales were down 17% on a reported basis on significant F/X pressure..
- Organic revenue was higher across all regions, led by a 4.5% increase in the Eastern Europe, Middle East & Africa business. Emerging markets reported organic revenue growth of 3.6%, while developed markets was also positive with a 1.3% gain. Power Brands delivered a 3.8% increase in organic revenue.
- Adjusted operating income margin rate +240 bps to 15.1%.
- "We significantly expanded margins by continuing to reduce supply chain and overhead costs," noted CEO Irene Rosenfeld.
- Previously: Mondelēz beats by $0.09, beats on revenue (April 27)
- MDLZ +2.56% premarket to $43.59.
Wed, Feb. 3, 11:27 AM
- Susquehanna dug down into Mondelez International's (MDLZ -7.2%) guidance in a fresh note to investors.
- The investment firm notes Mondelez's organic growth estimate of +2% is below its estimate of 4%, even with the F/X impact in-line with expectations.
- EBIT margin of 15% to 16% looks "disappointing" to analyst Pablo Zuniac.
- A 2018 target of operating income margin of 17% to 18% looks a tad "ambitious" to Susquehanna.
- Previously: Mondelēz misses by $0.02, beats on revenue (Feb. 03 2016)
- Previously: Mondelēz down post Q4 results (Feb. 03 2016)
Wed, Feb. 3, 9:09 AM
- Mondelēz (NASDAQ:MDLZ) reports organic net revenue growth of 4.7% in Q4.
- Power brands organic net revenue grew 5.5%.
- Organic net revenue from emerging markets +12.4% and developed markets +0.1%.
- Revenue break-up: Latin America: $1.258B (+1.5%, Organic net revenue: +23.8%); Asia Pacific: $1.082B (-5.5%, Organic net revenue: +1.2%); Eastern Europe,Middle East& Africa: $636M (-29.2%, Organic net revenue: +5.4%); Europe: $2.565B (-31.8%, Organic net revenue: -1.1%); North America: $1.823B (+2.1%, Organic net revenue: +2.6%).
- Adjusted gross profit margin rate improved 280 bps to 38.8%.
- Adjusted operating margin rate grew 120 bps to 13.9%.
- FY2016 Guidance: Organic net revenue: At least 2%; Adjusted operating income margin rate: 15% to 16%; Adjusted EPS: double-digit growth on a constant currency basis.
- MDLZ -4.39% premarket.
Oct. 28, 2015, 8:06 AM
- Mondelēz (NASDAQ:MDLZ): Q3 EPS of $0.42 beats by $0.01.
- Revenue of $6.85B (-17.9% Y/Y) beats by $40M.
- Shares +3.9% PM.
Oct. 23, 2015, 9:58 AM
- M&A talk in the food sector could set off a chain reaction, according to analysts.
- Kellogg's (K +0.2%) interest in Diamond Foods (DMND +6.6%) and a play by Treehouse Foods (THS +3.1%) for Ralcorp are in advanced stages, but other companies which could be drawn into talks include Boulder Brands (BDBD +0.5%), Amplify Snack Brands (BETR +1.7%), Mondelez International (MDLZ -0.1%), Campbell Soup (CPB +0.1%) and Hain Celestial Group (HAIN +0.4%).
- Private-label brands in particular may look appetizing to larger food companies.
- Previously: Reuters: TreeHouse in talks to buy Ralcorp from ConAgra (Oct. 22 2015)
- Previously: NY Post: Kellogg close to Diamond Foods buyout (Oct. 23 2015)
- Related ETF: PBJ
Sep. 16, 2015, 11:01 AM
- A statement from Anheuser-Busch InBev (BUD +5%) indicates the company must make a formal offer for SABMiller (OTCPK:SBMRY +19.5%) before October 14 or take a pass on the mega-merger to stay in compliance with U.K. law.
- There's a ripple effect with beer stocks circling the globe that includes distributors such as Compania Cervecerias Unidas (CCU +3.1%), Fomento Economico Mexicano (FMX +1.8%), AmBev (ABEV +2.1%).
- Another intriguing aspect of a potential A-B takeover of SABMiller is the side effects on the food industry if 3G Capital is fully engaged on the deal. 3G is a major player in food mergers and a factor in how investors value companies such as Mondelez International (MDLZ +0.2%), PepsiCo (PEP +0.4%), TreeHouse Foods (THS +0.1%), Campbell Soup (CPB +1.9%), JM Smucker (SJM +1.1%), and other food names.
- A-B InBev statement (.pdf)
- Previously: AB InBev prepping offer for SABMiller
- Previously: Beer stock rally with M&A on tap
Aug. 14, 2015, 1:44 PM
- Nestle (OTCPK:NSRGY, OTCPK:NSRGF) or General Mills (GIS +0.5%) could make a run at Mondelez International (MDLZ +0.9%) with Berkshire Hathaway and 3G effectively taking themselves out of the bidding process for a few years due to the Kraft-Heinz merger, speculates The Deal.
- A buyer of Mondelez will have to be heavy hitter due to the company's estimated enterprise value of +$90B. PepsiCo (PEP +0.3%) fits the bill and has Nelson Peltz backing the play, but has a board and CEO seemingly uninterested.
Aug. 6, 2015, 9:15 AM
Jul. 30, 2015, 8:15 AM
- Margins were on the move at Mondelez International (NASDAQ:MDLZ) in Q2.
- Adjusted operating income margin +270 bps to 15.2%. The company says its on track to meet a 2016 operating income margin target of 15%-16%.
- Latin America organic revenue +19.7% off solid pricing trends.
- North America organic revenue +0.3%.
- Asia Pacific organic revenue +3.0%.
- Guidance: Mondelez increases full-year organic revenue guidance to +3% from +2%.
- Previously: Mondelēz beats by $0.08, beats on revenue
- MDLZ +4.06% premarket to $44.85.
Jul. 30, 2015, 8:03 AM
- Mondelēz (NASDAQ:MDLZ): Q2 EPS of $0.47 beats by $0.08.
- Revenue of $7.67B (-9.1% Y/Y) beats by $180M.
- Shares +3.9% PM.
Apr. 29, 2015, 8:20 AM
- Mondelez International (NASDAQ:MDLZ) reports revenue was impacted by a whopping 14.5 percentage points in Q1.
- The company cut into the F/X challenge a bit with solid pricing and strong organic growth in emerging markets.
- Gross margin rate +80 bps to 37.9% as reported.
- Operating income margin +60 bps to 10.4%.
- Guidance: Organic revenue growth of at least 2% is forecast for 2015 and double-digit EPS growth (constant currency). The strong U.S. dollar is expected to knock off 12 full percentage points from sales growth and $0.33 from EPS during the year.
- Previously: Mondelēz beats by $0.03, beats on revenue
- MDLZ +3.99% premarket to $38.27.
Mar. 26, 2015, 12:37 PM
- Deutsche Bank thinks 3G Capital will be back in the food sector for a major acquisition faster than some other investment firms anticipate.
- 3G put itself in a stronger position to make a major purchase by not adding debt in the Kraft deal.
- Analyst Eric Katzman sees some food names trading with a premium as the 3G shadow hangs over the sector, while others have downside risk with M&A speculation not making as much sense.
- Premium on: ConAgra (NYSE:CAG), General Mills (NYSE:GIS), Mondelez International (NASDAQ:MDLZ), Pinnacle Foods (NYSE:PF), PepsiCo (NYSE:PEP).
- Premium off: Campbell Soup (NYSE:CPB), Hershey (NYSE:HSY), Hormel (NYSE:HRL), Kellogg (NYSE:K), J.M. Smucker (NYSE:SJM).
- Previously: Investors snapping up food stocks (Mar. 25 2015)
- Previously: Beer fallout from Kraft buyout (Mar. 25 2015)
- Previously: Kraft-Heinz merger has a few ETFs on the move (Mar. 25 2015)
Mar. 25, 2015, 7:07 AM
- Food stocks could see a lift today after a high-profile merger between Kraft and Heinz was announced.
- The sector has been identified by analysts as a likely hotbed for consolidation.
- Early premarket gainers include Mondelez International (NASDAQ:MDLZ) +2.1%, General Mills (NYSE:GIS) +1.0%, and Campbell Soup (NYSE:CPB) +0.4%.
- Previously: Kraft, Heinz announce merger
Mar. 24, 2015, 9:34 PM
- Kraft (NASDAQ:KRFT) finished AH trading at $71.44 following a WSJ report stating the company is in talks to sell itself to P-E firm 3G Capital. Mondelez (NASDAQ:MDLZ) rose 3.3% to $36.18, and ConAgra (NYSE:CAG) rose 1.9% to $35.27.
- The WSJ has added more details. Sources state a deal could be announced soon, and that 3G would use previously-acquired Heinz to make the purchase. It now calls buyout talks "advanced," and highlights 3G's track record of aggressively cutting costs at consumer companies it has acquired.
- The paper speculates Kraft "could be valued at well over $40 billion," given typical M&A premiums. The food/beverage giant closed AH with a $42.6B market cap.
Mar. 6, 2015, 10:46 AM
- Global consumer staples stocks are weaker than market averages as concerns on market pricing and F/X sit in the background.
- The 1.21% gain in the U.S. Dollar Index isn't going unnoticed by traders.
- Notable decliners include General Mills (NYSE:GIS) -1.6%, Colgate-Palmolive (NYSE:CL) -2.0%, Unilever (NYSE:UL) -1.9%, General Mills (GIS) -1.8%, Mondelez International (NASDAQ:MDLZ) -1.9%, Post Holdings (NYSE:POST) -1.8%, Hershey (NYSE:HSY) -1.8%, Coca-Cola (NYSE:KO) -1.2%.
- The Consumer Staples ETF (NYSEARCA:XLP) is down 1.2% versus S&P 500 -0.4%.
- Other staples ETFs: VDC, FXG, RHS, FSTA, PSL, PSCC
Mondelez International, Inc. is engaged in the manufacturing and marketing of snack food and beverage products, which include biscuits such as cookies, crackers and salted snacks, chocolate, gum & candy, coffee & powdered beverages and various cheese & grocery products. It operates its business... More
Sector: Consumer Goods
Industry: Food - Major Diversified
Country: United States
Other News & PR