Stock Strategist: Mondelez Offers a Sweet Treat

[Morningstar Logo]( [Company Site]( [Company News]( [Membership]( [Portfolio]( [Stocks]( [Options]( [Funds]( [ETFs]( [Markets]( [Tools]( [Personal Finance]( [Discuss]( Stock Strategist Mondelez Offers a Sweet Treat The stock has languished, but we still like this wide-moat company. [tab_bar] by Erin Lash, CFA | 9/21/2018 1:00:00 PM Irene Rosenfeld orchestrated significant change during her nearly decade-long reign at wide-moat [Mondelez]( [MDLZ](. However, after the announcement last August that she would step down, the shares have held flat versus a 17% rise in the S&P 500 index. We attribute some of this to competitive angst and sluggish top-line gains and some to new CEO Dirk Van de Put’s slowness to articulate his strategic roadmap. But we think investors fail to appreciate the experience he brings to the table. While we aren’t surprised that Van de Put’s top priority is reigniting sales, we never expected the company would opt to sacrifice the ha rd-fought operating margin gains of the past four years. Rather, we believe the company is poised to extract further inefficiencies while driving an acceleration in sales. We forecast 3%-4% average annual top-line growth through fiscal 2027 and another 300 basis points of operating margin expansion to around 20% by the end of the decade, versus consensus of low-single-digit sales growth and high teens margins. Our outlook aligns with management’s long-term targets of 3%-plus annual sales growth and high-single-digit adjusted earnings growth. Mondelez currently trades more than 15% below our fair value estimate. To read more, click [here](. Sponsored Links [Buy a Link Now]( New: ETF Managed Portfolios Center On [MorningstarAdvisor.com]( Tap into the industry's best source of information on ETF strategies for financial advisors. See key performance data, screen for specific strategy attributes, and learn more about this fast-growing area of the investment marketplace. [Click to get started](. Free Issue | Morningstar's Stock Newsletter >> Morningstar StockInvestor is celebrating more than 10 successful years of high-quality stock investing. Its two real-money portfolios have outperformed the S&P 500 since 2001. [Get new ideas for the core of your stock portfolio]( ). Search Most Recent Articles [How to Bridge a Retirement Shortfall]( [Morningstar's Guide to Rising Rates]( [Investors Flock to Ultrashort Bond Funds]( Latest Analyst Reports [British American Tobacco]( [Red Hat]( [Microsoft]( [AutoNation]( [Posco]( ABOUT OUR EMAIL TO UNSUBSCRIBE this email address to the Stock Strategist newsletter, please click "reply" and then click "send." This will unsubscribe only this email address to this specific newsletter. All subscription changes will take effect within one business day. Replies are not read by individuals, so please do not use this for queries about Morningstar.com. If you have questions about Morningstar.com or your membership, send a note to [joe@morningstar.com](mailto:%20joe@morningstar.com). ABOUT OUR PRIVACY POLICY Please [click here]( to learn about Morningstar's privacy policy. (c) Copyright 2018. Morningstar, Inc. 22 West Washington Chicago, Illinois, 60602 All rights reserved.