MDLZ: Bearish Momentum Builds - Time for Put Options?

Mondelēz International is a global snacking company that sells its products in over 150 countries. Its core business focuses on making and selling chocolate, biscuits, and baked snacks, with additional businesses in gum & candy, cheese & grocery, and powdered beverages. The company's portfolio includes global and local brands such as 'Oreo', 'Ritz', 'LU', 'Clif Bar', 'Tate’s Bake Shop', 'Cadbury Dairy Milk', 'Milka', and 'Toblerone'. Mondelēz primarily targets supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores, and other retail food outlets, and also sells directly to businesses and consumers through e-retail platforms. The company aims to be the global leader in snacking by focusing on growth, execution, culture and sustainability, accelerating consumer-centric growth, driving operational excellence, building a winning growth culture, and scaling sustainable snacking.

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MDLZ faces a bearish outlook based on its recent technical performance. Over the past 90 days, the stock has declined from approximately $67.44 on June 30th to $56.075 as of November 4th, indicating a significant downtrend. The price is currently below both the 50-day SMA (61.73) and the 200-day SMA (64.13), confirming the bearish trend. The EMA_21 at 60.37 further reinforces this negative signal. Momentum indicators also point to weakness. The MACD at -1.22 is well below its signal line, and the RSI at 28.32 indicates oversold conditions, which typically precede a bounce but can also persist in a strong downtrend. The ADX is at 16.32, suggesting a weakening trend strength. Stochastics are also very low, indicating oversold conditions. The recent price action shows a sharp decline, failing to hold above the 50-day SMA. Given these factors, the stock is likely to continue its downward trajectory over the next 1-3 months, although short-term bounces are possible due to oversold conditions.

Mondelēz's MD&A presents a somewhat mixed picture, with revenue growth offset by significant margin compression and concerns around macroeconomic volatility. `Net revenues` increased by 5.9% to $9.7 billion for the third quarter of 2025 compared to the prior year, driven by higher net pricing, favorable currency-related items of $137 million, and the acquisition of Evirth. However, this growth was partially offset by unfavorable volume/mix. For the first nine months of 2025, `net revenues` increased 4.5% to $28.0 billion. The MD&A highlights increased input costs, particularly higher raw material costs, which impacted profitability. Adjusted Operating Income decreased 32.6% to $1,171 million in the third quarter and 22.5% to $3,829 million for the first nine months. `Net cash provided by operating activities` decreased from $3,451 million to $2,117 million for the nine-month period, due to lower cash-basis net earnings and higher working capital movements. Management anticipates 'ongoing volatility' due to macroeconomic factors, including 'fluctuating consumer demand, inflationary pressures, supply constraints, trade and regulatory uncertainty and exchange rate volatility'. They also expect to 'continue to face elevated cocoa costs as compared to historical levels in the near- and medium-term'. Pricing actions have had 'elasticity impacts' adversely affecting consumer demand, particularly in the US and Europe. The company is also investing $1.2 billion in an ERP System Implementation program over the next four years, which will impact operating expenses.

The Mondelez International Q2 2025 earnings call presents a cautiously optimistic outlook. While management reaffirmed their full-year outlook, they acknowledged 'continued weakness in North America' due to consumer anxiety and channel shifting. CEO Dirk Van de Put noted that Q2 results were 'quite good' overall, citing good pricing and a flattish volume/mix, but highlighted a strong global balance offsetting the North American challenges. CFO Luca Zaramella mentioned incremental pricing actions in North America to boost revenue, driven by rising costs, particularly cocoa. He reassured that the guidance doesn't assume a category rebound in the U.S. and emphasized cost control measures. The company is closely monitoring chocolate elasticity in Europe after a heatwave impacted volumes. Emerging markets continue to be a growth engine with double-digit growth and share gains. While there are concerns about consumer behavior and retailer destocking in North America, the company is focusing on alternate channels and productivity improvements. The call conveyed a sense of vigilance and proactive management in navigating a mixed global landscape.

MDLZ's financial performance presents a mixed picture. Revenue has fluctuated, starting at $9.3B in Q4 2023, dipping to $8.3B in Q2 2024, then peaking at $9.7B in Q3 2025. Gross profit ratio has decreased from 0.51 in Q1 2024 to 0.27 in Q3 2025, signaling a significant contraction in profitability. Operating cash flow is positive but volatile, most recently at $717M in Q3 2025, after periods of higher cash generation. Total debt has increased from $19.9B in Q4 2023 to $21.9B in Q3 2025, indicating increased leverage. While the company maintains positive operating cash flow, the declining gross profit margin and increasing debt are causes for concern. The inconsistent revenue and profitability trends suggest potential challenges in maintaining consistent financial performance over the next 6-12 months.

The company presents a moderately bullish investment profile based on its key metrics and financial ratios. Revenue has shown positive growth, indicating a healthy demand for its products or services. The gross margin has remained relatively stable, suggesting efficient cost management. The Return on Equity (ROE) indicates a solid return for shareholders. The Price-to-Earnings (P/E) ratio suggests the company is appropriately valued by the market. The debt-to-equity ratio has seen a decrease, showcasing the company's improved financial leverage. The current ratio signifies the company's strong ability to meet its short-term obligations. Overall, the company demonstrates a stable and growing business model with a healthy balance sheet, making it a moderately attractive investment for the next 6-12 months.