Will Mondelez (MDLZ) Stock Fall on Bearish Susquehanna Note?
Bloomberg News
NEW YORK (TheStreet) -- Shares of Mondelez (MDLZ) - Get Report are up 0.5% to $45.12 late Wednesday morning even though Susquehanna said the company's unsolicited bid for Hershey (HSY) will most likely fail, Barron's reports.
"Todd Stitzer tried (former CEO of Cadbury), WM Wrigley also tried, and now Mondelez CEO Irene Rosenfeld is trying. But we think the outcome will be the same: no sale of HSY," the firm said in a note cited by Barron's.
"True, the Mondelez approach is well-timed given the slew of challenges faced by the Hershey Trust (owner of a 34% economic interest in Hershey, but holder of 81.5% of the voting stock)," Susquehanna added.
Additionally, diversification would probably help the Hershey Trust's ultimate mission of funding and operating the Milton Hershey School, where the endowment per student ratio is $6 million compared with $1.7 million at Harvard University, according to the firm.
"But our read of politics and regulations in Pennsylvania, makes us doubt a sale will ultimately take place. There are too many (mostly political) variables that would need to come together," Susquehanna said.
Shares of Hershey are down 0.52% to $109.98 late this morning.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on Mondelez stock.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: MDLZ