Mondelez Stock Trading Above 200 & 50-Day SMA: How to Play Ahead?

Core Insights - Mondelez International, Inc. (MDLZ) is experiencing strong upward momentum, trading above its 200-day and 50-day simple moving averages, indicating price stability and a long-term bullish trend [1] - The company has seen a 9.9% increase in shares over the past three months, outperforming the industry and broader market indices [1] Performance Drivers - Mondelez's growth is driven by a focus on core categories such as chocolate, biscuits, and baked snacks, which have shown resilience during economic downturns [3] - In Q2 2024, the biscuits and baked snacks category grew by 0.8%, while the chocolate category saw a sales increase of 5.6% [4] - The company aims to generate around 90% of its revenues from these core categories by 2030 [3] Strategic Initiatives - Mondelez is reshaping its portfolio through acquisitions, including Ricolino, Clif Bar, and Chipita S.A., and has formed a strategic partnership with Lotus Bakeries to co-develop new chocolate products [5] - The company plans to launch co-branded products with Lotus Bakeries in Europe in early 2025, aligning with its long-term growth strategies [5] Financial Performance - Mondelez reported a 4.7% increase in organic net revenues in Q2 2024, driven by favorable pricing [6] - The company expects organic net revenue growth in the upper range of 3-5% for 2024, reflecting completed price negotiations in Europe and improvements in North America [7] Challenges - Mondelez faces challenges from rising input costs, inflation, and consumer uncertainty, particularly in North America [8] - The company is dealing with cost inflation in the chocolate segment due to surging cocoa prices, which has impacted its adjusted gross margin [9] - Despite mitigating some pressures through price increases, the company anticipates that elevated cocoa prices will remain a significant headwind in the second half of 2024 [9] Investment Outlook - Mondelez is well-positioned for growth with strategic pricing initiatives and a focus on resilient core categories [10] - However, persistent challenges such as rising cocoa prices and inflationary pressures could limit upside potential in the near term [10]