Mondelez International is a top consumer staples stock at Wells Fargo
Tim Boyle/Getty Images News
Wells Fargo tagged Mondelez International (NASDAQ:MDLZ) as the best bet in the consumer staples sector after factoring in the food giant's Q1 earnings report.
While MDLZ handily beat on both price and volume/mix to driving solid +12% EPS growth, analyst Chris Carey and team think margin leverage may have even more upside ahead.
"MDLZ will be in better position H2 to spend behind growth initiatives in the US once capacity comes on and the supply chain stabilizes further. Emerging Markets (~40% of sales) grew 25% in Q1 driven by both product innovation and distribution expansion. China seems to have recovery upside this year with ongoing share gains and new product intros."
Carey warned on some headwinds in Europe for MDLZ after the company implemented higher pricing in 80% of the region with limited disruption. The remaining 20% is seen being harder to negotiate and could pose a potential risk to Q2. However, working in MDLZ's favor is the potential for higher elasticity realization and organic sales growth.
Wells Fargo increased its price target on Overweight-rated MDLZ to $82 from $77 on the expectation for balanced price and volume growth.
More on Mondelez International:

Mondelez: Impressive And Steady EPS Growth With A Bullish Chart, But Pricey
Read the more breakdowns on Mondelez International from Seeking Alpha analysts
View the growth metrics
See the financial and valuation comparisons to sector peers
Dig into the Seeking Alpha Quant Rating