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Monster Beverage Posts Sales, EPS Beat: 4 Sell-Side Takes

Dave Royse

The market woke up Thursday to energetic interest in Monster Beverage Corporation (NASDAQ: MNST), which was surging after posting better-than-expected top-line results.

Monster reported 15.8-percent organic sales growth in the fourth quarter, and its earnings per share of 43 cents beat Street estimates.

The Analysts

  • Macquarie Research analyst Caroline Levy maintained an Outperform rating on Monster with a $68 price target.
  • Wells Fargo Securities analyst Bonnie Herzog maintained a Market Perform rating and raised the price target from $55 to $59.
  • BMO Capital Markets analyst Amit Sharma maintained an Outperform and boosted the target price from $60 to $62.
  • UBS Global Research Analyst Sean King, he bear of the bunch, has a Sell rating on Monster and lifted the price target from $48 to $52.

Macquarie

Macquarie expects strong sales growth for most of the year for Monster despite a weak January, Levy said in a Thursday note.

The analyst cited good underlying demand for the energy drink. Levy also likes the company’s introduction of some new products: performance energy drink Reign, which is set to launch in March to compete with BANG, and Dragon Tea.

Soft January sales created some value in a company from which investors should expect solid annual growth, she said.

Wells Fargo

Herzog liked Monster’s better-than-expected year-over-year international sales growth of 30 percent, but said Wells Fargo remains cautious due to pricing and competition from BANG and Red Bull.

Another concern: ongoing arbitration in a dispute with Coca-Cola Co. (NYSE: KO) over the soft drink giant’s plan to launch energy drinks that was announced late last year.

BMO

Monster’s top-line beat shows why it “remains one of the most attractive growth investments in staples,” Sharma said in a Thursday note. A recent price increase and lower aluminum costs should lift margins, the analyst said.

View more earnings on MNST

“We continue to expect international markets to ramp up and contribute meaningfully to top-line growth, including increasing the footprint in China, along with solid sales momentum in the U.S.”

UBS

King doesn’t see much in Monster stock to be energetic about. 

“While [the fourth-quarter] topline soundly beat expectations, we see little change to a challenging 2019 setup,” King said in a Wednesday note. The analyst expects continuing U.S. market share loss to Red Bull and Bang, uncertainty around the Coca-Cola issue, various production cost headwinds and a China growth strategy he fears will yield profit losses through 2019, among other sticking points. 

Price Action 

Monster shares were up 9.75 percent at $64.46 at the time of publication Thursday. 

Related Links:

SunTrust Turns Bullish On Monster Beverage

As Coke Shakes Up Energy Drink Category, Monster Earns A Downgrade

Photo by Marcus Quigmire/Wikimedia. 

Latest Ratings for MNST

Date Firm Action From To
Feb 2019 BMO Capital Maintains Outperform Outperform
Feb 2019 Morgan Stanley Maintains Equal-Weight Equal-Weight
Jan 2019 SunTrust Robinson Humphrey Upgrades Hold Buy

View More Analyst Ratings for MNST
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