On Wednesday, Citi analysts revised the price target for Mondelez (NASDAQ:MDLZ) International (NASDAQ:MDLZ) stock, dropping it to $71 from the previous $78, while still retaining a Buy rating on the company.
The adjustment comes in response to the recent surge in cocoa prices, which are anticipated to impact the earnings of chocolate producers in the latter half of 2025 more significantly than in the first half.
The increase in cocoa prices has been sharp over the last couple of months, and since cocoa hedges typically extend nine months or more, the effect on future earnings could be substantial. Mondelez International, known for its confectionery products, is currently in the process of determining its pricing strategy. The company may consider implementing more considerable price increases for its chocolate products compared to The Hershey Company (NYSE:HSY), which has already announced a 3-4% net pricing action for 2025.
The Hershey Company, carrying a Sell rating from Citi, might need to take further pricing measures if cocoa costs maintain their current levels. In contrast, Mondelez, with stronger underlying demand trends, has more room to adjust prices.
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