With a market cap of $56.8 billion, Monster Beverage Corporation (MNST) energizes the world with its dynamic range of energy drinks and beverages. Based in Corona, California, Monster also offers iced teas, juices, coffee drinks, sports drinks, and sodas, including natural and flavored options.
Shares of the beverage giant have underperformed the broader market considerably over the past year. MNST has declined 8.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 27.2%. In 2024, Monster’s stock fell 5.4%, while $SPX rose 10% on a YTD basis.
Narrowing the focus, MNST's price performance trails behind the S&P 500 Cons Staples Sector SPDR’s (XLP) marginal gain over the past year and 7.3% return on a YTD basis.
MNST stock lagged behind the broader indexes over the past year due to macroeconomic headwinds like currency volatility and industry headwinds from a shift toward healthier beverage options.
However, on May 8, shares of MNST rose briefly following the company's announcement of a modified Dutch auction tender offer for up to $3 billion of its outstanding stock. The tender will be open until June 5, with a price range of $53 to $60 per share.
For the current fiscal year, ending in December, Street expects MNST’s EPS to grow 14.2% year over year to $1.77. Monster Beverage’s earnings surprise history is mixed. It beat or matched the consensus estimate in two of the last four quarters while missing on two other occasions.
While the company’s EPS missed Wall Street’s estimates by 4.6% in the last reported quarter, its reported sales, which rose 11.8% annually, slightly missed analysts’ projections.
Despite some downgrades last month, the consensus rating among the 21 analysts covering MNST stock is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” seven “Holds,” and one “Strong Sell.”
This configuration is slightly less bullish than a month before, with 14 analysts advising a "Strong Buy."
BMO Capital analyst Andrew Strelzik maintains a “Market Perform” rating on Monster Beverage stock and lowers the price target from $58 to $56, which suggests an upside potential of just 2.8% from the current price levels.
However, the mean price target of $62.60 suggests a 14.9% premium to MNST from current levels. The Street-high target of $69 represents an upside potential of 26.7%.
On the date of publication, Kritika Sarmah 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.
