New Trade for July 20th, 2021

This morning in early trading stocks were looking to bounce back from yesterday’s sell-off.  Yesterday’s sharp drop came on the heels of rising hospitalizations in states with the lowest vaccination numbers across the country.  Another bout with the virus threatens to thwart a steady economic recovery if social restrictions are reinforced.  Volatility can be expected as the story unfolds.  All sectors finished yesterday’s session red.  Consumer Staples was the relative outperformer, dropping a fraction of what other sectors lost. 

Online sales have been boosting revenues of a few key companies in the food industry space as high consumer dependency on digital transactions has pushed them to bolster online offerings.  To continue building on the sales momentum, the company featured in today’s trade alert is bolstering operations at fulfillment centers.  Keep reading to find out which beloved snack maker is striving to meet growing demand.  

Well-known chocolate, candy and snack manufacturer, Mondelez International (MDLZ) has been gaining on robust demand in developed markets while performance in the emerging markets continues to improve.  All the while, Mondelez has been focused on lucrative acquisitions, cutting costs and brand building through innovation.  

Most recently, the oreo-maker  acquired Chipita, a Greek company whose croissants and baked snacks helped it generate $580 million in sales last year.  The company’s products are most popular in Eastern Europe, but have great potential for growth around the globe, especially in emerging markets.  

“It’s a real win-win situation in my opinion,” Mondelez CEO Dirk Van De Put said in an interview with CNBC’s Jim Cramer.  “We can use their distribution, their presence to build on distribution, but also to bring our brands to their products. Imagine a croissant with Cadbury chocolate.” 

Organic revenues have also benefited from efficient pricing strategies and higher volumes.  Plus, the company is currently engaged in rationalizing operational structures in an effort to cut costs.  This bodes well for the stock in the mid and long term.  

The company will be looking to beat the consensus estimate of $0.65 EPS when it reports Q2 earnings on July 27th.  MDLZ shares have gained nearly 20% in the past year and nearly 11% year-to-date.  The stock also comes along with a 1.97% dividend yield. 

Of 22 analysts polled 19 rate the stock a Buy, 3 rate it a Hold.  There are no Sell ratings for Mondelez. The 20 analysts offering a 12-month forecast for the stock have a median target of $69, which represents an 8.13% upside from its current level.

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