NEW YORK — Shifting its focus away from margin expansion is one of six strategic changes driving greater top-line growth for Mondelez International, Inc., according to a Nov. 25 research publication from New York-based Morgan Stanley.

Morgan Stanley maintained an overweight stock rating on Mondelez International, Deerfield, Ill., after recently meeting with top executives, including Dirk Van de Put, chief executive officer. Morgan Stanley gave a price target of $60 per share for Nov. 19, 2020, which compared to Mondelez’s share price of $51.80 on the Nasdaq on Nov. 19, 2019. Morgan Stanley forecast organic top-line growth of about 3.5% and EBIT growth of about 5.5%.

Mondelez’s shift to top-line growth particularly emphasizes volume growth relative to a historical price-driven top-line growth, according to Morgan Stanley. The other five strategic changes are shifting toward a more country-based approach, changing incentive compensation to emphasize volume growth and gross profit growth rather than gross margins, increasing focus on local brands that historically were de-prioritized versus global brands like Oreos and Cadbury, being more effective with marketing, and reinvesting in advertising/marketing, digital capabilities, new product development, and routes to market.

Top-line growth year to date in 2019 stood at 4.2%, which compared with 2.3% in 2018 and 0.8% in 2017. A stronger Easter execution and a favorable cycling of the heat wave in Europe in 2019, which hurt chocolate sales in 2018, had positive impacts on year-to-date sales this year, according to Mondelez. Morgan Stanley expects to see organic sales growth ending up at about 3.5% in 2019 as top-line growth in the fourth quarter should not be as strong as in the first three quarters.

In the United States, Mondelez sales growth was 2.5% year to date in 2019, which compared with 1.3% in 2018 and a decline of 0.7% in 2017. Solid pricing supported market share gains for Mondelez, according to Morgan Stanley, which pointed to U.S. price increases in categories like crackers, cookies and candy. Mondelez is addressing weakness in its U.S. gum business by expanding in the mint segment.

Mondelez International will keep an eye on opportunities for mergers and acquisitions with a focus on bolt-on acquisitions, according to Morgan Stanley. The potential bolt-on acquisitions could come in three areas: geographical reinforcement by filling in white space areas in certain markets, expansion in the company’s current categories to gain exposure to growing sub-segments, and brands that focus on health and wellness, premium or digital.

Morgan Stanley pointed out Mondelez in 2019 has had problems in Brazil that included issues with production and supply chain and weakness in the powdered beverage business. The issues with production and supply chain, which were driven by Mondelez moving to two manufacturing plants in Brazil from four, should be resolved by the end of 2020, according to Morgan Stanley.