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Important Notice - Fraud awareness
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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    Investors continue to snack on the Mondelez share price

    We are familiar with stocks who have been winners and losers in the aftermath of the COVID-19 pandemic, with the Mondelez share price a stand out on the recovery side. Many investors have run for cover and dumped stocks in travel and hospitality whose earnings have dived in the wake of COVID-19, or whose revenues remain under a cloud of uncertainty. Perhaps the easiest way for many has been to gravity towards the clear winners, those stocks exposed to online retail, technology and hard assets such as precious metals. But there may be a class of stock like Mondelez shares who, by definition, are relatively consistent and immune to the vagaries of consumer spending power or disposable income.

    Learn more about shares trading

    Mondelez shares safe from headwinds

    Snacks group Mondelez would appear to fit the bill in terms of being safe from the headwinds of the pandemic, a point underlined by the recovery in the Mondelez share price since March. This is based as much in terms of consistency of earnings, and the way they have held up against the ups and downs of the economic cycle.

    Given that with the Oreo to Cadburys group we are looking at low ticket items where consumer discretion and impulse buying can exist even when incomes are being squeezed and many are in a work from home environment, one can assume with Mondelez shares the earnings visibility is more transparent than most.

     

    MDLZ shares: earnings strength

    However, with a company like Mondelez we are looking at the opposite of disruption, whether by lockdown, or competition. Here it is earnings strength and consistency born of the portfolio of brands and products, from Cadbury’s Crème Eggs, to Cote D’or to Oreos.

    This has made it a beacon of revenues over the past year, something which has been illustrated well by the way that Q3 2020 revenues of $6.67bn were so close to $6.36bn for the same time last year. Given that between these two announcements occurred one of the most disruptive events of recent times – the arrival COVID-19, one has to marvel at how the performance of the Mondelez has remained so reliable, if only looking at the supply chain issues the pandemic has brought. Adding in the different timings of lockdown measures and economic considerations, and from an investment perspective it can be said that Mondelez shares are hard-wired to perform. 

     

    Mondelez shares: 3% top line growth

    But while the Mondelez share price has so far proven itself as a steady pair of hands through turmoil, we should be aware that the market is forward looking and would be keen to know that the consistency can be maintained. This is particularly so given the way that doubters. They may be soothed by current estimates that the EPS will rise from Q3’s $0.63 to $0.67, and revenues stretch up to $7.13bn.

    Perhaps most important of all is that the company itself has said it can sustain 3% top line growth going into 2021. Given the reliability of earnings through 2020, it is likely that most observers of the snack food giant would go with this prediction.

    To see all upcoming news and data releases that’ll have an effect on the financial markets, check out our Economic Calendar. It’ll cover all major releases from global economies and give you the exact time the release is due, the previous data, forecast data and actual data (once released).

     

    DLZ share price daily chart uptrend

    Daily chart showing Mondelez share price uptrend for 2020

     

    Last Updated: 05/11/2020

    This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


     

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