Mondelez International, Inc. (MDLZ): what the price requires
At today's price, Mondelez International, Inc. (MDLZ) is priced for +9.7% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/MDLZ
Headline
| Field | Value |
|---|---|
| Ticker | MDLZ |
| Company | Mondelez International, Inc. |
| Current price | $59.77/sh |
| Composition | Biscuits & Baked Snacks 48% / Chocolate 33% / Gum & Candy 11% / Beverages 3% / Cheese & Grocery 6% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 5.2% |
| Operating margin today | 8.9% |
| Margin compression implied | -3.7pp |
| Implied growth | 9.7% |
| Multiple paid | 27x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.9pp.
Reconcile: at the x-ray's 9.3% required return this reads ~5.4 years; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.17σ |
| cohort percentile (of 69 peers) | 75 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.61x | 5 | expensive |
| Earnings | 2.95x | 4 | expensive |
| Relative | 1.14x | 3 | expensive |
| Growth | 1.29x | 4 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.0%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $43.70 | 1.37x | yes | FCF base $2.7B, growth 8% (input: historical growth), terminal g 4.0%, WACC 9.0%, 6yr projection |
| DCF Exit Multiple | Growth | $59.19 | 1.01x | yes | Exit EV/EBITDA: 13.9x / 15.9x / 17.9x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $50.24 | 1.19x | yes | P/E 22x (static sector reference · 2026-04), scenarios: 18.4x / 22.0x / 25.6x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $25.01 | 2.39x | yes | Stage 1: -5% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $21.93 | 2.73x | yes | BV/sh $20.02, ROE (TTM) 10.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $22.92 | 2.61x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $49.50 | 1.21x | yes | Rev $39.3B, growth 8% (input: historical growth; tapered), Terminal P/S: 1.6x / 2.0x / 2.3x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $30.61 | 1.95x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $4.88B × (1−21%) / WACC 9.0% → EPV (no growth) |
| Residual Income | Asset | $23.11 | 2.59x | yes | BV $20.02 + 5yr PV of (ROE (TTM) 10.1% − Kₑ 9.3%) × BV; BV grows 6.6%/yr |
| Graham Number | Asset | $30.17 | 1.98x | yes | √(22.5 × EPS $2.02 × BVPS $20.02) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $52.30 | 1.14x | yes | EBITDA $5.05B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $18.94 | 3.16x | yes | FCF $2575.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $17.89 | 3.34x | yes | SBC-adj FCF $2.45B (FCF $2.58B − SBC $0.13B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $1.69 | 35.36x | yes | EPS $2.02 × (8.5 + 2×-4.7%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $4.86 | 12.30x | yes | BV $20.02 × (ROIC 2.2% / WACC 9.0%) |
| P/Sales Sector | Relative | $61.13 | 0.98x | yes | Revenue $39.30B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $21.84 | 2.74x | yes | EPS $2.02 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $18.1b |
| Net debt / NOPAT (after-tax) | 6.75x |
| Net debt / operating income (pre-tax) | 5.33x |
| Interest coverage | 5.7x |
| Share count CAGR (buyback) | -2.1% |
| Burning cash | no |
Bullet Takeaways
Mondelez is a global snacking company built on Biscuits and Baked Snacks (about 48% of revenue), Chocolate (33%), and Gum and Candy (11%), with brands like Oreo, Cadbury, and Milka. The decisive number right now is the cocoa bill: record cocoa costs cut Q1 2026 adjusted operating income about 19% at constant currency even as revenue grew.
The franchise kept pricing through it. Net revenue rose 8.2% to $10.1 billion (organic up 3.0%), driven by higher net pricing, with strength in Europe, India, and Brazil. That is pricing power doing exactly what a defensive staple is supposed to do under input-cost stress.
At about $60 (as of June 27, 2026) the price reads within range, justified mainly by the relative-multiple frame while the asset and earnings-power models say expensive. The dividend (around a 3.6% yield) plus roughly $3 billion of buybacks is a meaningful part of the total return.
Bull Case
The single metric that decides the next year is whether Mondelez can keep pricing faster than cocoa inflates its costs, and Q1 2026 says it can hold the top line while the cost wave passes through. Net revenue rose 8.2% to $10.1 billion, with organic net revenue up 3.0% driven by higher net pricing. The 10-K describes the mechanism plainly: pricing actions were "input cost-driven" and "reflected across all categories," and in the segments where productivity offset costs, "segment operating income increased $37 million (7.0%), primarily due to higher pricing, lower manufacturing costs driven by productivity." A company that can push price across its whole portfolio and still grow organically through a record cocoa shock has the pricing power that defines a defensive staple.
The portfolio is the reason that pricing sticks. Biscuits and Baked Snacks, the largest category at roughly 48% of revenue, is led by Oreo and belVita, brands with shelf positions and habitual demand that absorb price increases better than commodity food. Chocolate at 33% is where the cocoa pain lands, but it is also where Cadbury and Milka carry pricing authority in their core markets. The geographic mix adds durability: management called out strength in Europe, India, and Brazil, and the emerging-market exposure is a structural growth lane that most US-centric packaged-food peers lack. The cocoa cost is cyclical; the brand and distribution moat is not.
The capital return makes the wait pay. Mondelez generates roughly $3 billion of free cash flow, pays a dividend yielding about 3.6%, and runs an aggressive buyback (around $3 billion annualized against about $2.5 billion of dividends), shrinking the share count about 2.1% a year. Management reaffirmed full-year 2026 guidance despite the tough quarter, projecting organic net revenue growth of flat to 2% and adjusted EPS growth of flat to 5% at constant currency. The bull case is straightforward: a 3.6% yield plus buybacks plus modest organic growth is a high-single-digit total return from a business whose margins should recover as cocoa normalizes, and the Strong Buy consensus with a roughly $70 median target sits above the current price.
Bear Case
Start with the qualitative problem before the multiple: Mondelez is growing revenue by raising prices into a category where the consumer can trade down or buy less, and the volume data is already flashing. Organic growth of 3.0% came with unfavorable volume and mix, which means the 3% is pricing, not more product sold. That is the uncomfortable signature of a staple under cost stress: the headline holds, but the units are slipping, and there is a limit to how far you can price chocolate before shoppers reach for the private-label bar or a cheaper treat. The price-to-fundamentals disconnect here is not that the multiple is absurd; it is that the earnings the multiple sits on are being defended by price increases that may not be repeatable if cocoa stays elevated and volumes keep eroding.
The margin damage is real and current. Record cocoa costs cut adjusted operating income about 19% at constant currency and pushed adjusted EPS down nearly 15%, and the full-year 2026 outlook is muted, organic revenue growth of flat to 2% and adjusted EPS growth of flat to 5%, with management noting that any EPS upside is likely to be reinvested rather than dropped to the bottom line. A staple guiding to roughly flat earnings while it absorbs commodity inflation is not the steady compounder the multiple implies. On the static frames, that gap shows: earnings power value lands near $31, simple excess return near $22, and the FCF-yield frame near $19, all far below the roughly $60 price, with a blended X-ray near $34. Only the relative-multiple and exit-multiple frames reach the tape.
The balance sheet is the quiet constraint. Net debt of about $18 billion sits near 4.9 times trailing operating income, with interest coverage around 6 times. That is investment-grade but not light, and it is being carried while the company funds a $3 billion buyback and a $2.5 billion dividend out of roughly $3 billion of free cash flow. If cocoa costs stay high longer than expected, or if volume erosion forces price rollbacks, the cash available for that capital return tightens, and the leverage leaves less room to maneuver. The bear conclusion is that at about $60 the market is paying a recovery multiple for a business whose recovery depends on a commodity it does not control and a consumer who is already buying less.
Valuation
Mondelez reads as within range, with the price justified mainly by the relative-multiple frame while the asset-based and earnings-power models say expensive. The dispersion is wide: the exit-multiple DCF lands near $59 and P/Sales near $61, essentially at the $60 price, EV/EBITDA relative near $52 and relative valuation near $50, while the conservative frames are far lower, earnings power value near $31, the Graham number near $30, simple excess return near $22, and the FCF-yield frame near $19. The blended X-ray sits near $34. The inversion solves on operating income with an implied company-wide operating-profit growth around 10.3%, which is above the roughly 8% revenue growth and reflects an expectation that margins recover as cocoa costs phase through.
The sensitivity is high: each point of cost of capital moves the implied growth about 8.8 points, so the valuation is rate-sensitive, which matters for a leveraged staple. The reliability of the solve is rated ok.
The practical read is that Mondelez is not cheap on the conservative methods and not expensive on the peer-multiple methods, which is exactly what a quality staple in a cost-pressured year looks like. The valuation case rests on margin recovery: if cocoa normalizes and the pricing already taken flows back to operating income, the earnings-power frames re-rate toward the price. If cocoa stays high and volumes keep eroding, the conservative frames are the more honest guide and the price has further to fall. The total return is buttressed in the meantime by the roughly 3.6% dividend and the buyback.
Catalysts
Q1 2026 (reported late April) was a revenue beat with a margin miss. Net revenue rose 8.2% to $10.1 billion, organic net revenue grew 3.0% on higher pricing (with unfavorable volume and mix), but record cocoa costs cut adjusted operating income about 19% at constant currency and pushed adjusted EPS down nearly 15% to $0.67. Strength came from Europe, India, and Brazil.
Management reaffirmed full-year 2026 guidance: organic net revenue growth of flat to 2% and adjusted EPS growth of flat to 5% at constant currency, with any EPS upside likely reinvested. The company continues to target roughly $3 billion of free cash flow.
The dominant swing factor is the cocoa cost curve. The 2026 outlook embeds the assumption that cocoa pressure phases through and stabilizes; a further spike would pressure margins again, while a normalization would let the pricing already taken flow back to profit.
Analyst sentiment is constructive: a Strong Buy consensus from about 39 analysts with a median target near $70, above the current price. Capital return is steady, a dividend yielding about 3.6% plus roughly $3 billion of annualized buybacks. The watch items are cocoa costs, volume and mix trends (the sign of whether pricing is reaching its limit), emerging-market momentum, and the pace of margin recovery into the back half of 2026.
Peer Cohorts (Per Segment, With Filing Citations)
AMEA (reported)
- GIS (GENERAL MILLS INC)
- (no filing in the citation store)
- CPB (THE CAMPBELL'S COMPANY)
- (no filing in the citation store)
- SJM (THE J. M. SMUCKER COMPANY)
- (no filing in the citation store)
- CAG (CONAGRA BRANDS, INC.)
- (no filing in the citation store)
- MKC (McCORMICK & COMPANY, INCORPORATED)
- (no filing in the citation store)
- HRL (HORMEL FOODS CORPORATION)
- (no filing in the citation store)
- KDP (Keurig Dr Pepper Inc.)
- (no filing in the citation store)
- PEP (PepsiCo, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.