Mondelez Int'l (MDLZ) Stock Advancing on Price Target Hike

NEW YORK (TheStreet) -- Shares of Mondelez International (MDLZ) are gaining by 0.35% to $40.16 on Monday after analysts at Credit Suisse upped their price target to $48 from $42 with an "outperform" rating.

The company makes biscuits and crackers such as Oreo cookies, Cadbury chocolates and Nilla wafers.

Mondelez has more room for operating margin expansion beyond the 15%-16% goal established for 2016, analysts said, after meeting with management.

The Illinois-based company recently announced that it will close half of the production at its South Chicago biscuit facility and will either transfer capacity to Salinas Mexico or build faster production lines in Chicago, according to the note.

This transition will vastly improve gross margins, analysts said.

Separately, TheStreet Ratings team rates MONDELEZ INTERNATIONAL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MONDELEZ INTERNATIONAL INC (MDLZ) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 98.8% when compared to the same quarter one year prior, rising from $163.00 million to $324.00 million.
  • 40.34% is the gross profit margin for MONDELEZ INTERNATIONAL INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.17% trails the industry average.
  • Net operating cash flow has significantly increased by 51.12% to -$282.00 million when compared to the same quarter last year. Despite an increase in cash flow, MONDELEZ INTERNATIONAL INC's cash flow growth rate is still lower than the industry average growth rate of 80.47%.
  • The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.41 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: MDLZ Ratings Report

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