Investing.com -- Wells Fargo upgraded Mondelez (NASDAQ:MDLZ) International to Overweight with a $78 price target, citing improving fundamentals and a compelling risk-reward setup relative to its staples peers.
“This is not a cocoa call,” analysts said, emphasizing that the bull case is grounded in strong price execution, muted inflation expectations into 2026, and a favorable valuation backdrop.
The firm highlighted three primary reasons for its positive stance. First, chocolate elasticities are holding up well despite record pricing.
“Europe chocolate elasticities are -0.25 YTD,” Wells Fargo (NYSE:WFC) wrote, better than Mondelez’s assumed range of -0.4 to -0.5 and in line with historical norms. “Anchoring this elasticity assumption in our model implies FY Europe org sales ~+12%,” the analysts added.
Second, inflation pressures are expected to ease next year. “MDLZ is showing it can price big if needed and hold the line on elasticities,” they noted.
According to Wells Fargo’s proprietary commodity model, “commodities appear neutral to 2026,” increasing confidence in margin expansion.
Finally, Wells Fargo sees Mondelez delivering “algorithm EPS in 2026 (model +9% y/y),” with organic sales of +3% and gross margin expansion of 100bps, even while SG&A grows at +6%.
Notably, the bank says “MDLZ is currently 21x NTM P/E vs PG/KO 23x, CL 24x, HSY 29x, MNST 33x, despite EPS growth 2x (or more) vs this cohort.”
“A bull case is possible (and upside), but we don’t think it’s needed… this is a unique stock,” wrote Wells Fargo, adding that it is “one that can grind.”