Valued at a market cap of $59.5 billion, Monster Beverage Corporation (MNST) is a beverage company headquartered in Corona, California. It develops, markets, sells, and distributes a wide range of energy drink brands, including Monster Energy, Monster Ultra, Reign Total Body Fuel, Java Monster, and Burn, as well as other beverages such as non-carbonated iced teas, juices, water, sports drinks, and flavored malt beverages.
Shares of the energy drinks company have surged past the broader market over the past 52 weeks. MNST stock has rallied 18.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17%. Moreover, on a YTD basis, MNST stock is up 16.1%, compared to SPX’s 8.2% return.
Zooming in further, MNST’s outperformance looks even more pronounced when compared to the First Trust Nasdaq Food & Beverage ETF’s (FTXG) 7.6% downtick over the past 52 weeks and 2.4% loss on a YTD basis.
Monster Beverage delivered mixed Q1 results on May 8, and its shares closed up 1.4% in the following trading session. The company’s overall revenue declined 2.3% year-over-year to $1.9 billion, falling short of consensus estimates by 6.6%. Its top line was negatively impacted by distributors' ordering patterns in the U.S. and EMEA, unfavorable foreign exchange effects, poor weather conditions, and reduced sales in the Alcohol Brands segment. However, despite the drop in revenue, its adjusted EPS improved 10.2% from the year-ago quarter to $0.47, surpassing Wall Street expectations by a penny. Favorable pricing strategies combined with supply chain optimization supported its profitability.
For the current fiscal year, ending in December, analysts expect MNST’s EPS to grow 14.2% year over year to $1.85. The company’s earnings surprise history is disappointing. It missed the consensus estimates in three of the last four quarters, while surpassing on another occasion.
Among the 20 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on nine “Strong Buy,” one "Moderate Buy,” eight “Hold,” and two "Strong Sell” ratings.
This configuration is slightly less bullish than a month ago, with 10 analysts suggesting a “Strong Buy” rating.
On Jul. 29, Evercore Inc. (EVR) analyst Robert Ottenstein maintained a “Buy” rating on MNST and set a price target of $65, indicating a 6.5% potential upside from the current levels.
The mean price target of $63.45 represents a 3.9% premium from MNST’s current price levels, while the Street-high price target of $74 suggests an upside potential of 21.2%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
