Mondelez International Inc (MDLZ)

Conclusion

Mondelez International is a Chicago-based snack and confectionery maker, with brands such as Oreo, Ritz and Cadbury Dairy Milk. At a price of 66.44 USD on 2026-11-09, its market capitalisation is 84.1 billion USD.

The verdict is fair. The P/E of 20.6 sits below its ten-year median of 22.4, and EV/EBITDA of 14.4 sits below its median of 20.3. The DCF gives 59.62 USD per share at a discount rate of 8.87%, while the fair value from historical multiples is 82.60 USD. The fair value band runs from 56.89 to 85.33 USD with a midpoint of 71.11 USD, a margin of safety of 7.0%. The reverse DCF implies growth of 7.8% a year, against revenue growth of 7.7% over five years and free cash flow per share growth of 3.0% over five years.

What holds the case up: free cash flow conversion of 89.7% on a trailing basis, a Beneish M-score of -2.40 (reading unlikely), and interest coverage of 10.2. What would break it: a current ratio of 0.62, an EPS compound decline of -5.2% a year over five years, and a net margin of 10.2% against a ten-year median of 12.8%.

Financial health

Financial strength is yellow: interest coverage of 10.2 and a low insolvency risk hold it up, while a current ratio of 0.62 pulls it down. Net debt to EBITDA of 2.84 is neutral. Debt to equity is 0.84, and the quick ratio is 0.33. The Altman Z-score of 2.54 falls in the grey zone. Insolvency risk: low, about 0.9% by the estimate of the Ohlson model over one to two years. The company has a trailing interest coverage of 10.2, so debt service is not the immediate pressure. The weakness is short-term liquidity: current liabilities are well above current assets, which the company manages through cash generation rather than a cash buffer.

Earnings quality

Earnings quality is green. Free cash flow conversion of 89.7% trailing and 86.9% over five years, a Beneish M-score of -2.40 (reading unlikely), and a five-year share count change of -2.1% a year, which reflects buybacks, all hold it up. The accrual ratio of -2.9% is also favourable. Stock-based compensation is small at 0.41% of revenue, leaving free cash flow after it at 3.50 billion USD. The Piotroski score of 5 out of 9 is only neutral. The company beat estimates in seven of the last eight quarters, with an average surprise of 6.5%. Estimate revisions are mixed: for the next year, two estimates moved up and six moved down in the last 30 days, and the 90-day change is 0.08%.

Profitability

Profitability is green, held up by a net margin of 10.2% and an operating margin of 13.7%, close to its median of 13.9%. The gross margin of 34.3% is well below its ten-year median of 39.1%, and the net margin is below its median of 12.8%. ROIC is 9.2% against a WACC of 7.8%, a ROIC minus WACC of 1.45%, which is neutral. ROIC has a five-year median of 7.8%. Return on equity is 15.3%, but leverage contributes. The DuPont split for 2025 shows a net margin of 6.4%, asset turnover of 0.54 and an equity multiplier of 2.77, so most of the equity return comes from borrowed capital rather than operating efficiency.

Growth

Growth is yellow. Revenue compound growth is 7.0% over three years, 7.7% over five years and 2.7% over ten years. Revenue grew in seven of the last ten years. Earnings per share have shrunk: compound change of -1.3% over three years, -5.2% over five years and -8.2% over ten years. Free cash flow per share has grown, at 4.8% over three years, 3.0% over five years and 6.3% over ten years. Analysts expect next-year EPS growth of 10.2%, which is the main reason the growth signal is not weaker. Over the last decade, sales have grown but profit per share has not kept pace.

Valuation

Valuation is yellow: the multiples sit below their ten-year medians, except price to book, and the verdict is fair. The P/E of 20.6 is 7.9% below its median, EV/EBITDA of 14.4 is 29.1% below, price to free cash flow of 23.0 is 19.6% below, and price to sales of 2.1 is 25.4% below. Price to book of 3.16 is 6.8% above its median of 2.96. The DCF gives 59.62 USD per share at a discount rate of 8.87%, with a growth assumption of 7.7% for the first stage and 2.5% in the terminal stage. The terminal value is 57.7% of the DCF. The fair value from historical multiples is 82.60 USD. The reverse DCF implies 7.8% growth against the 7.7% revenue growth over five years. The fair value band is an order of magnitude built on fixed assumptions, not a price target. The dividend yield is 3.06%, with a forward yield of 3.15%, and the payout is 70.3% of free cash flow.

Risks

The current ratio of 0.62 is the weakest liquidity figure: a shortfall in cash generation would leave little buffer for short-term obligations. The five-year EPS decline of -5.2% a year would, if it continued, erode the earnings base behind the fair value band. The net margin of 10.2% against a median of 12.8% means that any further pressure on pricing or costs would reduce both profit and the cash flow the DCF relies on. The DCF depends on the terminal value for 57.7% of its result, so small changes in long-term assumptions move the value substantially. The analysis has limits: it has no debt maturity schedule and no revenue by segment, so it cannot show when debt falls due or which product lines drive growth.