Stocks pairs trading: EXPD vs MDLZ
Let's examine the trade potential for Expeditors International (EXPD) and Mondelez International (MDLZ) by analyzing their key financial metrics and recent performance to determine reasons for going long on MDLZ and short on EXPD.
Price-to-Earnings (P/E) Ratio:
EXPD: P/E ratio of 26.94
MDLZ: P/E ratio of 21.22
A lower P/E ratio suggests that MDLZ is potentially undervalued compared to EXPD. Investors might expect higher growth prospects from MDLZ or believe it's currently priced more attractively relative to its earnings.
Earnings Growth:
EXPD: EPS next Y of 5.90%
MDLZ: EPS next Y of 6.27%
Both companies exhibit modest earnings growth, but MDLZ has a slightly higher expected EPS growth rate. This indicates better future profitability prospects for MDLZ compared to EXPD.
Summary of Recent News:
EXPD: Expeditors International recently reported a quarterly earnings beat but faced a revenue miss due to weak logistics demand. Analysts have mixed views with some projecting a downside risk, citing soft freight shipping demand and a competitive market environment.
MDLZ: Mondelez International, although facing some short-term challenges, has been focusing on strategic acquisitions and expansion in emerging markets, which could drive future growth. Analysts remain optimistic about its long-term potential due to its strong brand portfolio and global reach.
By leveraging these insights, the recommended strategy is to go long on MDLZ, capitalizing on its growth potential and relatively attractive valuation, while shorting EXPD, given its challenges in revenue growth and market outlook
Decision:
Long on: 2 MDLZ
Short on: 1 EXPD
Price-to-Earnings (P/E) Ratio:
EXPD: P/E ratio of 26.94
MDLZ: P/E ratio of 21.22
A lower P/E ratio suggests that MDLZ is potentially undervalued compared to EXPD. Investors might expect higher growth prospects from MDLZ or believe it's currently priced more attractively relative to its earnings.
Earnings Growth:
EXPD: EPS next Y of 5.90%
MDLZ: EPS next Y of 6.27%
Both companies exhibit modest earnings growth, but MDLZ has a slightly higher expected EPS growth rate. This indicates better future profitability prospects for MDLZ compared to EXPD.
Summary of Recent News:
EXPD: Expeditors International recently reported a quarterly earnings beat but faced a revenue miss due to weak logistics demand. Analysts have mixed views with some projecting a downside risk, citing soft freight shipping demand and a competitive market environment.
MDLZ: Mondelez International, although facing some short-term challenges, has been focusing on strategic acquisitions and expansion in emerging markets, which could drive future growth. Analysts remain optimistic about its long-term potential due to its strong brand portfolio and global reach.
By leveraging these insights, the recommended strategy is to go long on MDLZ, capitalizing on its growth potential and relatively attractive valuation, while shorting EXPD, given its challenges in revenue growth and market outlook
Decision:
Long on: 2 MDLZ
Short on: 1 EXPD
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