11:41 AM EDT, 07/26/2024 (MT Newswires) -- Mondelez International's ( MDLZ ) long-term prospects remain promising, but consumer pressures in developed markets and high cocoa prices could impact Q2, RBC Capital Markets said in a note Friday.

Analysts, including Nik Modi, said that while they remain confident about the company's long-term distribution opportunity, they are cautious about its near/medium term. In the US, the company's biscuit sales are likely to remain under pressure through 2024 and it could see additional negative effects from pricing negotiations in Europe not reflected in consensus.

The analysts added that the emerging markets look better, but recent checks suggest biscuit sales in Latin America, especially Mexico, may be weak. Looking beyond Q2, high cocoa prices could significantly impact margins in H2 and into 2025.

After reorganizing its structure, decision-making, and portfolio through mergers, acquisitions, and divestitures, Mondelez ( MDLZ ) is now a top-tier consumer staples company and should be valued as such, the analysts said, adding that the company is seeing strong growth across its product lines.

"While recent quarters have been hampered by some transitory headwinds, we view these as mostly temporary in nature and interpret recent relative underperformance in staples as an opportunity. We believe the company will drive strong growth via distribution expansion with substantial remaining headroom to do so, supplemented by recent accretive acquisitions," the analysts said.

RBC has an outperform rating and a $80 price target on Mondelez International ( MDLZ ).

Price: 66.47, Change: +0.08, Percent Change: +0.12