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Hershey vs. Mondelez: Which Stock Wins Chocolate Season?
MarketBeat· 2025-09-25 20:02
Core Insights - The Hershey Company has outperformed Mondelez International nearly 2:1 in 2025, despite both companies facing challenges from rising cocoa prices [1][2] - The management of rising costs and the strength of non-chocolate portfolios will be crucial for both companies as peak candy demand approaches during Halloween and the holidays [2] Group 1: Hershey Company - Hershey's stock was one of the worst performers in 2024 due to higher commodity prices and a change in leadership, with Kirk Tanner replacing Michele Buck [4] - The company has successfully implemented a price increase of approximately 26% on popular products like Reese's and Kit-Kat, demonstrating its ability to pass costs to consumers [5] - Hershey has diversified its product offerings, launching new products like Shaq-A-Licious XL Gummies, which sold over 11 million units, and expanding its portfolio of salty snacks [6][7] Group 2: Mondelez International - Mondelez has also expanded its portfolio beyond chocolate but has not shown the same strong gains as Hershey, relying more on cost-cutting measures to preserve margins [8] - The company's earnings report indicated a 15% year-over-year drop in EPS, compared to Hershey's 3% decline, highlighting Hershey's better performance in passing price hikes to consumers [9] - Analysts suggest that while Mondelez stock may have more upside based on conventional metrics, it needs to prove its ability to pass on higher cocoa prices to consumers [10][11] Group 3: Market Sentiment and Analyst Ratings - Recent upgrades for Hershey include a rating increase from Neutral to Outperform by BNP Paribas Exane and a significant upgrade from Goldman Sachs from Sell to Buy, raising its price target to $220 [12] - Analysts expect a 15% gain for Hershey, which is higher than the 13% growth anticipated for Mondelez stock, indicating a more favorable outlook for Hershey [12] - Mondelez currently holds a Moderate Buy rating among analysts, but it is not included in the list of top stocks recommended by leading analysts [13]
No more need for needles: A new generation of GLP-1 weight-loss drugs in pill form is coming closer
WSJ· 2025-09-18 14:00
Makers of GLP-1 drugs, including Novo Nordisk and Eli Lilly, are close to releasing pills taken daily to help shed pounds as an alternative to weekly injections. ...
McDonald's Settles $10B Lawsuit: Should You Buy Now or Hold Steady?
ZACKS· 2025-06-16 14:06
Core Viewpoint - McDonald's Corporation has settled a multibillion-dollar lawsuit with Byron Allen, avoiding potential reputational damage and aligning with its diversity and inclusion commitments [1][2] Group 1: Legal Settlement - McDonald's reached a confidential settlement with Allen's Entertainment Studios Networks and Weather Group, resolving a lawsuit originally valued at $10 billion for alleged racial discrimination in advertising [2] - The settlement terms were undisclosed, but McDonald's will advertise on Allen's platforms at "market rates" [2] Group 2: Growth Drivers - McDonald's is focusing on value through initiatives like the McValue platform and affordable price menus, aiming to drive customer traffic [3] - The company is enhancing operational efficiency by integrating cross-functional teams and investing in technology, such as IoT-enabled restaurant equipment [4] - Recent marketing campaigns, including the Minecraft Movie promotion and McCrispy Chicken Strips launch, have received positive consumer feedback [5] Group 3: Competitive Landscape - McDonald's faces increasing competition from BJ's Restaurants, Chipotle, and CAVA, but its segmented focus on high-performing categories, particularly beverages, provides a strategic advantage [6] Group 4: Earnings Outlook - The Zacks Consensus Estimate for McDonald's 2025 earnings per share has been revised upward from $12.22 to $12.25, indicating strong analyst confidence [7] Group 5: Macro Headwinds - McDonald's is experiencing challenges from persistent inflation and economic uncertainty, leading to a 3.6% drop in U.S. same-store sales in Q1 2025 [12] - Cost inflation in beef, labor, and packaging is impacting margins, particularly in Europe, where high single-digit inflation is prevalent [13] - Concerns over the long-term effects of GLP-1 weight-loss drugs on consumer behavior are affecting sentiment in the fast-food sector [14] Group 6: Stock Performance & Valuation - McDonald's shares have declined 6% in the past month, underperforming the broader restaurant industry [15] - The stock is trading at a forward 12-month P/E of 23.81X, below the industry average of 25.91X, suggesting it may be undervalued [17] - Technical indicators show McDonald's is trading below its 50-day moving average, reflecting weak investor momentum [18] Group 7: Investment Verdict - McDonald's long-term growth prospects are supported by its global brand, focus on value platforms, and investment in digital innovation [21] - However, near-term challenges include inflation, soft traffic trends, and margin pressures, leading to a cautious investment outlook [25] - Holding the stock may be prudent for existing shareholders, while prospective investors might wait for improved visibility on traffic and margins before investing [26]