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Can Higher Costs Mar Monster Beverage's (MNST) Earnings in Q1?

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·5 min read
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Monster Beverage Corporation MNST is expected to report first-quarter 2022 results on May 5, after the closing bell. The beverage company is anticipated to have witnessed revenue and earnings growth in the to-be-reported quarter.

The Zacks Consensus Estimate for first-quarter revenues is pegged at $1.43 billion, indicating growth of 14.8% from that reported in the year-ago quarter. The consensus estimate for earnings of 61 cents per share suggests growth of 3.4% from 59 cents reported in the year-ago quarter. The consensus mark has moved down by a penny in the past 30 days.

In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate. It has delivered an earnings surprise of 1.4%, on average, in the trailing four quarters.

Monster Beverage Corporation Price and EPS Surprise

Monster Beverage Corporation Price and EPS Surprise
Monster Beverage Corporation Price and EPS Surprise

Monster Beverage Corporation price-eps-surprise | Monster Beverage Corporation Quote

Key Factors to Note

Monster Beverage has been experiencing continued strength in its energy drinks category, particularly the Monster Energy brand. Management is optimistic about strength in the energy drinks category, with the Monster Energy brand growing significantly. Gains from strong demand for energy drinks are likely to have aided Monster Beverage's top line in the first quarter.

The company is expected to have witnessed momentous growth in e-commerce, club store, mass merchandiser and grocery-related businesses.

Monster Beverage has been committed to product launches and innovation to boost growth. Management has been optimistic about the significant growth potential of its Monster Energy brand. Product launches across the Monster family are expected to have driven the company’s overall top and bottom lines in the to-be-reported quarter.

However, Monster Beverage’s margins have been under pressure due to the ongoing logistics and supply-chain challenges. The company is expected to have witnessed shortages in its aluminum can requirements in the United States and EMEA, owing to its higher cost of importing aluminum cans and elevated aluminum commodity pricing. Freight inefficiencies, trucking availability, shortages of shipping containers, port of entry congestion, insufficient co-packing capacity, and delays in receiving certain ingredients are also likely to have marred the bottom line in the first quarter.

Higher outbound freight and warehouse costs, elevated sponsorship and endorsement expenses, increased marketing expenses (including social media and digital marketing), and higher payroll costs are likely to have resulted in higher SG&A expenses in the first quarter. The higher operating expense rates, mainly resulting from increased selling and distribution expenses, are also expected to have hurt Monster Beverage’s performance.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Monster Beverage this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Monster Beverage has a Zacks Rank #3 and an Earnings ESP of -3.03%.

Stocks Poised to Beat Earnings Estimates

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

Corteva CTVA currently has an Earnings ESP of +0.70% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports first-quarter 2022 results. The consensus mark for CTVA’s quarterly revenues is pegged at $4.5 billion, which suggests a rise of 8.1% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Corteva’s earnings has been unchanged at 81 cents per share in the past 30 days. The consensus estimate indicates a 2.5% increase from 79 cents reported in the year-ago quarter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

US Foods USFD currently has an Earnings ESP of +19.32% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports first-quarter 2022 numbers. The consensus mark for USFD’s quarterly earnings has moved up 38.1% in the past 30 days to 29 cents per share. The consensus estimate suggests 141.7% growth from the year-ago quarter’s reported number.

The Zacks Consensus Estimate for US Foods’ quarterly revenues is pegged at $7.8 billion, which suggests growth of 23.9% from the figure reported in the prior-year quarter.

Constellation Brands STZ currently has an Earnings ESP of +0.09% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports first-quarter fiscal 2023 results. The consensus mark for STZ’s quarterly revenues is pegged at $2.2 billion, which suggests 7.8% growth from the figure reported in the prior-year quarter.

The consensus mark for STZ’s quarterly earnings has moved down 2.3% in the past 30 days to $2.52 per share. However, the consensus estimate suggests growth of 8.2% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Constellation Brands Inc (STZ) : Free Stock Analysis Report

Monster Beverage Corporation (MNST) : Free Stock Analysis Report

US Foods Holding Corp. (USFD) : Free Stock Analysis Report

Corteva, Inc. (CTVA) : Free Stock Analysis Report

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