MDLZ

Mondelez is a high-quality global snacking leader whose top line keeps compounding — revenue rose to $38.5B in FY2025, up 5.8% YoY and extending a steady climb from $28.7B in FY2021. The problem is entirely below the revenue line: gross profit fell 23.3% to $10.9B, operating income dropped 44.1% to $3.55B, and diluted EPS collapsed 44.7% to $1.89. The 10-K and MD&A name the cause explicitly — 'soaring commodity prices (especially for cocoa beans)' compressed margins, and the pricing increases used to offset them triggered 'elasticity impacts… particularly in the United States and Europe' that hurt volume. This is a margin squeeze, not a demand-quality or franchise problem.

That distinction drives the call. The trailing P/E of 31.8 looks expensive, but it is calculated on trough earnings: net income of $2.45B is roughly half the $4.6–5.0B the company earned in FY2023–FY2024. On the prior run-rate of ~$4.5B net (~$3.50 EPS), the stock trades closer to ~17x — a fair, not cheap, multiple for a staples leader. Management offers a partial tailwind, guiding that 'cocoa costs to be lower in 2026 compared to the current year,' while cautioning costs stay 'elevated… as compared to historical levels in the near- and medium-term.' So the earnings recovery is plausible but neither immediate nor fully in management's hands.