MDLZ: AI Marketing Efficiencies Will Support Margins Despite 2026 Demand Concerns

Analysts have trimmed their fair value estimate for Mondelez International from US$68.85 to about US$67.48. This reflects a wave of lower price targets as they factor in muted volume growth for large consumer staples, tighter valuation multiples, and ongoing questions around cocoa costs, competitive pressure, and the broader 2026 earnings setup.

Analyst Commentary

Recent Street research on Mondelez highlights a mix of optimism about execution and cost tailwinds, alongside caution on volumes, valuation, and category competitiveness as investors look toward 2026.

Bullish Takeaways

Bullish analysts still see Mondelez as well positioned in consumer staples, with several maintaining positive ratings even as they trim price targets. This signals ongoing confidence in the company’s long term earnings power.
Some expect cocoa to be deflationary in 2026 and see Mondelez as prepared to use any cost benefits to support pricing, advertising and consumer spending, and U.S. supply chain investments. This could support execution on growth initiatives.
There is an expectation from some research that healthy living categories should hold up better in 2026. This may support Mondelez’s growth profile where it has exposure to these trends.
JPMorgan’s view that Mondelez could deliver organic sales and earnings only slightly below consensus in Q3, based on earlier company comments, suggests they see the current challenges as manageable rather than thesis breaking.

Bearish Takeaways

Bearish analysts are resetting expectations for large cap consumer staples, calling out a challenging setup into 2026. Volume growth for the group is seen as unlikely to improve materially from the 0.9% decline flagged for 2025, and pricing is expected to be muted.
Several firms cut price targets on Mondelez as part of sector wide revisions, pointing to compressed valuation multiples and limited scope for a broad rerating while fundamentals remain weak and macro uncertainty is elevated.
Q3 was described by one major bank as disappointing, with the quarter seen as an early indication that consumer staples companies, including Mondelez, may need to rebalance demand expectations and earnings plans for FY25 and beyond.
Concerns around cocoa costs, competition, and the evolution of the consumer in developed markets keep some analysts cautious, especially where restoring earnings power is seen as dependent on factors such as input cost trends and improved market share performance.

What's in the News

Mondelez updated its 2025 outlook, guiding to organic net revenue growth of 4%+ for the year, giving investors a clearer anchor for near term expectations. (Company guidance)
From July 1, 2025 to September 30, 2025, Mondelez repurchased 3,760,310 shares, about 0.29% of shares, for US$239.95m. This brought total repurchases under the December 11, 2024 authorization to 30,602,798 shares, or 2.33%, for US$1,805.59m. (Company filing)
Mondelez is using a new AI tool developed with Accenture to reduce marketing content production costs by 30% to 50%, with plans for the tool to generate short TV ads ready for airing as soon as next year's holiday season. (Reuters)
Jon Halvorson, who spent the past eight years at Mondelez, is expected to be named chief marketing officer at Kenvue, drawing attention to Mondelez's marketing talent bench and leadership moves in the broader consumer space. (Wall Street Journal)

Valuation Changes

The fair value estimate was reduced slightly from US$68.85 to about US$67.48, reflecting a modest recalibration of assumptions.
The discount rate was essentially unchanged, moving fractionally from 6.96% to 6.96%, signalling a stable risk framework in the model.
Revenue growth was trimmed marginally from about 4.20% to roughly 4.20%, indicating a very small adjustment to projected top line expansion.
The net profit margin eased slightly from about 10.77% to roughly 10.76%, pointing to a minor change in expected profitability levels.
The future P/E was adjusted down from about 23.50x to roughly 23.06x, implying a modestly lower valuation multiple applied to forward earnings.

Mondelez's global pricing strategy and strategic growth agenda aim to increase revenue and market share, especially in Europe and emerging markets.
Innovative brand activations and sustainability initiatives are expected to enhance consumer engagement, brand loyalty, and long-term value creation.
Elevated cocoa costs and decreased consumer demand are pressuring profit margins, with potential risks from economic uncertainties and trade tensions impacting future revenues.

Catalysts

About Mondelez International

Through its subsidiaries, manufactures, markets, and sells snack food and beverage products in the Latin America, North America, Asia, the Middle East, Africa, and Europe.What are the underlying business or industry changes driving this perspective?

Mondelez International is executing a robust pricing strategy in response to high cocoa costs, which is expected to improve revenue as pricing takes effect globally, especially in markets like Europe and emerging markets.
The company is implementing a strategic growth agenda that includes reinvesting in brands, expanding distribution, and strengthening market presence, which should positively impact revenue growth and market share.
Mondelez’s focus on innovative brand activations and product collaborations, like the Oreo and Post Malone partnership and Cadbury Dairy Milk with Lotus Bakeries, are expected to enhance consumer engagement and drive revenue growth.
The ongoing investment in sustainability initiatives, such as scaling the Cocoa Life program and reducing carbon emissions, is likely to support long-term value creation and enhance brand loyalty, potentially improving net margins.
Mondelez continues to expand its presence in emerging markets, adding over 100,000 stores, which is expected to drive growth in market share and revenue as consumer confidence stabilizes and economic conditions improve in these regions.

Mondelez International Earnings and Revenue Growth

Mondelez International Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Mondelez International's revenue will grow by 4.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 9.8% today to 11.1% in 3 years time.
Analysts expect earnings to reach $4.7 billion (and earnings per share of $3.8) by about September 2028, up from $3.6 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.4x on those 2028 earnings, up from 22.2x today. This future PE is greater than the current PE for the US Food industry at 19.5x.
Analysts expect the number of shares outstanding to decline by 3.23% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Mondelez International Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Elevated cocoa costs significantly impacted adjusted gross profit and consequently affected EPS, posing a risk to net margins if prices remain high or increase further.
North America experienced a decline due to retailer destocking and softer consumer demand, particularly from lower-income households, which could continue to pressure earnings and margins.
Volume/mix was down 3.5% due to elasticity, with potential future risks if consumers continue to react negatively to higher prices, leading to revenue challenges.
Consumer confidence in key markets like Brazil, Mexico, and China is soft due to economic uncertainty, which could impact demand and subsequently revenue and earnings growth.
Increasing trade tensions and potential tariff impacts, although manageable now, could create future expense pressures or require strategic adjustments, affecting net profits.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $74.417 for Mondelez International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $88.0, and the most bearish reporting a price target of just $67.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $42.7 billion, earnings will come to $4.7 billion, and it would be trading on a PE ratio of 22.4x, assuming you use a discount rate of 6.8%.
Given the current share price of $62.57, the analyst price target of $74.42 is 15.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

MDLZ: Lower Cocoa Costs And Supply Chain Upgrades Will Drive Efficiency