UBS Lowers Mondelez Price Target Ahead of Q1 Earnings
UBS has revised its price target for snack-food giant Mondelez International (NASDAQ: MDLZ) from $80 to $78, while maintaining its “Buy” rating on the stock. The adjustment comes in anticipation of the company’s upcoming Q1 earnings report, slated for April 30.
The analysts at UBS cited a strong North American performance as likely to support first-quarter results, but pointed to multiple near-term pressures that could affect margin expansion. In particular, Mondelez is expected to face headwinds from escalating cocoa prices, inflationary cost structures in multiple markets, and foreign exchange pressures—especially in Latin America and the Middle East and Africa (MEA) region.
Despite these short-term challenges, UBS remains constructive on the company’s longer-term earnings potential and market positioning. Mondelez’s strategic focus on core snacking categories—particularly biscuits and chocolate—continues to deliver steady top-line growth. Leveraging premiumization and emerging-market expansion, the company has shown resilience amid global cost volatility.
The price of cocoa, a key input for Mondelez’s chocolate portfolio, recently surged to record highs due to tight global supply. This input cost spike is expected to weigh on near-term gross margins, despite ongoing pricing strategies implemented by the company to mitigate inflation. UBS noted that it may take time for price increases to fully translate into profitability improvements, particularly in markets with lower purchasing power.
Forex effects also pose a risk to reported earnings, with local currency volatility in regions like Latin America and MEA undermining strong local performance when translated into U.S. dollars.
Industry watchers will be closely monitoring Mondelez’s earnings call for updates on volume trends, pricing elasticity, and supply chain stability—factors critical to forward guidance during a period marked by input cost turbulence and logistical uncertainty.
With consumers showing sustained demand for affordable indulgences and trusted brands, Mondelez remains a key player in the global snacking segment. While margin pressures may cloud the Q1 results, UBS’s continued confidence in the stock underlines the firm’s belief in Mondelez’s strong fundamentals and its ability to adapt to shifting global macroeconomic conditions.