Citi maintains a "Buy" rating on Mondelez International (MDLZ), setting a target price of $71, as the company prepares to report its Q4 2024 earnings on January 28th. The report anticipates organic sales growth (OSG) of 6.4%, surpassing the Visible Alpha consensus of 5.8%, driven by strong performance in North America and Latin America. However, EPS is expected to be slightly below consensus at $0.66 due to elevated cocoa inflation and FX headwinds, which are anticipated to pressure gross margins.
Looking ahead to 2025, Citi projects organic sales growth of 4.2% and EPS of $3.27, both below consensus estimates, primarily due to continued FX and cocoa cost challenges. Despite these headwinds, Citi believes Mondelez's earnings pressure from cocoa is "transient" and expects it to be mitigated by pricing actions and growth in non-chocolate products. The report highlights that Mondelez's EPS growth is expected to outpace most large-cap food peers once cocoa inflation subsides.
Mondelez's stock was trading at $57.25, up 0.26% on January 15.