Mondelez Agrees To Buy Grenade; Street Sees 12% Upside


Mondelez International inked a deal to buy Grenade, a UK performance nutrition company, for an undisclosed sum. Shares of the snack food and beverage products provider rose 1.3% to close at $58.84 on March 22.

The deal broadens Mondelez’s (MDLZ) exposure to the snacking and fast-growing well-being segments. Furthermore, it provides a strong platform to explore the attractive high-protein and performance-nutrition segments.

Grenade, a leader in high-protein bars, has been growing the presence of its Carb Killa product across the UK, North America and Asia Pacific. Carb Killa has been the best-selling product in its segment since 2016.

As per Mondelez’s plans, Grenade will be operated separately to keep the authenticity of the brand intact, while the company will provide resources, support, and international scale to augment growth.

Mondelez CEO Dirk Van de Put said, “Grenade’s great-tasting, on-trend products are a great platform for Mondelēz International in the UK market and beyond. This is another exciting opportunity to deliver on our strategy to be a global leader in broader snacking, including in the important area of well-being.” (See Mondelez stock analysis on TipRanks)

On Feb. 16, Goldman Sachs analyst Jason English maintained a Buy rating and a price target of $69 (17.3% upside potential) on the stock.

English noted, “that the company reiterated its FY21 outlook while also focusing on illustrating plans to sustain top-tier sales growth across its snacking portfolio.”

The analyst said, “The company’s plans for expansion across geographies, across product segments and up and down price tiers appears more holistic and nuanced than in the past and lends more credibility to its growth ambitions.”

Shares have rallied 40.3% over the past year, while Wall Street analysts are still bullish about the stock. The Strong Buy consensus rating boasts 7 Buy ratings versus 1 Hold rating. Looking ahead, the average analyst price target stands at $65.86, putting the upside potential at about 12% over the next 12 months.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Mondelez is currently Very Positive as 15 hedge funds increased their cumulative holdings of the stock by 1.1 million shares in the last quarter.

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