Mondelez International, the global food giant behind brands like Oreo, Milka, and LU, is showing signs of operational slowdown despite modest revenue growth. As of 2025 (TTM), declining margins, a drop in net income, and a very high Price/FCF ratio are weighing on the stock’s attractiveness. Still, its ability to generate cash, powerful brand portfolio, and global reach make MDLZ a solid defensive play.
Market Overview (2025 )
- Stock Price (est.): ~$54.80
- Market Cap: ~$70.7 billion
- P/E Ratio: 20.5
- Price/Free Cash Flow: ~68.5
- Price/Sales: 2.15
Valuation appears rich — typical of industry leaders, but challenging given the margin compression.
Income Summary (2023–2025 TTM)
| Year | Revenue | Net Income | EPS (Diluted) | EBITDA | Net Margin |
|---|---|---|---|---|---|
| 2023 | $36,016 M | $4,968 M | $3.62 | $6,876 M | 13.77% |
| 2024 | $36,441 M | $4,623 M | $3.42 | $6,632 M | 12.65% |
| 2025 | $37,645 M | $3,531 M | $2.68 | $5,803 M | 9.38% |
Observations:
- +4.5% revenue growth over 2 years, but –29% drop in net income
- Ongoing margin erosion → signals profitability pressure
- EBITDA down nearly $1B in 2 years
Cash Flow (2023–2025)
| Year | FCF | CapEx | Cash Ops | Financing Cash Flow |
|---|---|---|---|---|
| 2023 | $3,602 M | –$1,112 M | $4,714 M | –$7,558 M |
| 2024 | $3,523 M | –$1,387 M | $4,910 M | –$5,780 M |
| 2025 | $2,290 M | –$1,286 M | $3,576 M | –$4,568 M |
Observations:
- FCF down –36% since 2023 → undermines current high valuation
- Heavy share buybacks (~–$3B/year) support price but reduce financial flexibility
- Solid, but declining operating cash flow
Margins & Profitability
| Ratio | 2023 | 2024 | 2025 (TTM) |
|---|---|---|---|
| Gross Margin | 37.02% | 33.59% | 30.45% |
| Operating Margin | 15.72% | 14.63% | 11.86% |
| Net Margin | 13.77% | 12.65% | 9.38% |
Continuous margin deterioration → raw material costs and FX pressures
Key Risks
- Margin erosion → weaker pricing power, inflation drag
- Price/FCF extremely high (~68x) → market expects a lot
- Aggressive buybacks → short-term boost, long-term risk of underinvestment
- Weak top-line growth vs. tech/healthcare
- No strong short-term catalysts in sight
Analyst Price Targets
| Scenario | Target Price | Timeframe | Justification |
|---|---|---|---|
| 📉 Bearish | $48 | Early 2026 | Margins under pressure, weak growth |
| ⚖️ Neutral | $55–$57 | Mid 2026 | Resilient FCF, strong brands, stable dividend |
| 🚀 Bullish | $62 | Late 2026 | Macro recovery, emerging market growth |
Fair Value (simplified DCF): ~$55
Current Price (~$54.80) = near fair value
Buy or Sell? — Final Verdict
Hold / Neutral
Mondelez remains a premium defensive stock, backed by global brands.
However, margin declines and expensive FCF valuation reduce near-term upside potential.
To Watch:
- Margin rebound in 2025–2026
- FCF trends and share buyback impact
- Entry opportunity if price dips below $51–$52
Conclusion: Is MDLZ a good buy in 2025?
For long-term investors: Yes — for stability and modest yield.
For short-term investors: Wait — market may have priced in its strengths, with no clear catalysts ahead.
Disclaimer :
This content is for informational purposes only and does not constitute investment advice. All investments carry risk, including the loss of capital. Conduct your own research before making any decision.
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