Mondelez International, Inc.MDLZNASDAQ

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $93.39 per share(market-calibrated)

+57.7%

Upside to Fair Value

Current

$59.21

Pure Model

$102.35

Fair Value

$93.39

Bull Case

$119.20

Bear Case

$88.55

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $102.35.

What's Driving This Ratingfor MDLZ

✓

CapEx already efficient

CapEx at 2.93% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 14.61% — below the sector mature average of 16.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $7.8B (15.55% margin).

→

Moderate revenue growth

Analyst consensus projects 3.07% revenue growth, fading to 2.50% by Year 10. Revenue reaches $50.5B (vs $38.5B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 63.02% indicates efficient cash generation. FCF reaches $6.0B by Year 10 (11.79% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.40

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)6.30%

Cost of Debt

Pre-tax Cost of Debt1.90%

Tax Rate24.08%

After-tax Cost of Debt1.45%

Equity Weight (E/V)77.38%

Debt Weight (D/V)22.62%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (77.38% × 6.30%) + (22.62% × 1.45%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$39.7B	$42.2B	$44.4B	$46.8B	$50.5B
EBIT	$5.8B	$6.2B	$6.5B	$7.1B	$7.8B
Tax	$1.4B	$1.5B	$1.6B	$1.7B	$1.9B
NOPAT	$4.4B	$4.7B	$4.9B	$5.4B	$6.0B
+ Depreciation	$1.3B	$1.3B	$1.4B	$1.5B	$1.6B
- Capex	$1.2B	$1.2B	$1.3B	$1.4B	$1.5B
- Δ NWC	$118M	$127M	$121M	$123M	$123M
Free Cash Flow	$4.4B	$4.7B	$4.9B	$5.4B	$6.0B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$4.2B	$4.0B	$3.8B	$3.7B	$3.5B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$6.0B

Terminal Growth Rate2.50%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$203.4B

PV of Terminal Value$119.1B

Exit Multiple Method

Year 10 EBITDA$9.4B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$188.9B

PV of Terminal Value$110.6B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$37.9B

PV of Terminal Value$119.1B

Enterprise Value$157.0B

(-) Net Debt$20.3B

Equity Value$136.7B

Shares Outstanding1.3B

Price per Share$105.63

Exit Multiple Method

PV of Projected FCFs$37.9B

PV of Terminal Value$110.6B

Enterprise Value$148.5B

(-) Net Debt$20.3B

Equity Value$128.2B

Shares Outstanding1.3B

Price per Share$99.08

Pure Model Fair Value

$102.35

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
3.50%	$151.32	$144.53	$138.07	$131.91	$126.04
4.50%	$112.27	$122.59	$138.07	$131.91	$126.04
5.50%	$90.51	$95.59	$102.35	$111.83	$126.04
6.50%	$75.94	$78.84	$82.47	$87.13	$93.34
7.50%	$65.15	$66.97	$69.15	$71.81	$75.15

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$88.55

49.5% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.50

Base Case

$102.35

72.9% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.40

Bull Case

$119.20

101.3% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.34

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth3.07%

Year 3 Revenue Growth3.10%

Year 5 Revenue Growth2.81%

Year 7 Revenue Growth2.69%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin14.61%

Terminal EBIT Margin16.00%

Tax Rate24.08%

Historical Capex / Rev2.93%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Defensive sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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