U.S. markets open in 1 hour 11 minutes

Mondelez's Strategic Plans Underway, Long-Term Goals Intact

Zacks Equity Research

Mondelez International, Inc. MDLZ shed light on its ongoing strategic initiatives, focused on delivering sustainable earnings and sales growth. Further, management reaffirmed its 2020 guidance and long-term goals at its 2020 Consumer Analyst Group of New York (CAGNY) Conference.

The company noted that within a year of its strategic plan launch, it recorded solid top and bottom-line growth along with enhanced free cash flow.

Further, it transformed from a centralized decision-making structure to a local-first approach with an increased focus on volume-driven growth.  Apart from this, Mondelez has been working toward investments in global and local brands. The company has been building a consumer-centric and growth-focused organization.

In connection with this, it has been refreshing its brand portfolio through product innovation, and extending its brands to newer geographies and platforms. In doing so, the company introduced an innovation platform namely, Joy Fills, in Europe to witness growth across brands such as Oreo, Cadbury and Milka. Also, the introduction of Lickables in India has been doing well.

Further, the company’s continued product innovation under the SnackFutures platform bodes well. Notably, management plans to focus on enhancing the snacking portfolio, an area which is growing rapidly across the globe.

Coming back to the news, management reiterated its guidance for 2020 as well as long-term growth goals. In this regard, the company continues to anticipate organic net sales growth of more than 3%. Adjusted earnings are still expected to grow in high-single digits at constant currency. Free cash flow is anticipated to be more than $3 billion. Further, dividend growth is expected to surpass bottom-line growth.

Speaking of cash flows, Mondelez has been undertaking some major steps to enhance savings, which are aiding margins and cash flow. Moreover, such savings are being invested in brand-building endeavors. We note that management is on track with savings initiatives such as zero-based budgeting. Additionally, the company is on track with its restructuring program called the Simplify to Grow Program, which is aimed at reducing operating costs.

We expect the Zacks Rank #3 (Hold) to keep gaining from such well-chalked out endeavors. Shares of the company have gained 13.2% in the past three months, outperforming the industry’s growth of 3%.

 

 

Looking for Better-Ranked Consumer Staples Stocks? Check These

Pilgrim’s Pride Corporation PPC has an expected long-term earnings growth rate of 22.5%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

US Food Holdings USFD has an expected long-term earnings growth rate of 7.5% and a Zacks Rank #1.

Lamb Weston Holdings LW, a Zacks Rank #2 (Buy) stock, has an expected long-term earnings growth rate of 8.8%.

Free: Zacks’ Single Best Stock Set to Double

Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.