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.
- 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 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.
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.
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.
“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.”
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.
Monster shares were up 9.75 percent at $64.46 at the time of publication Thursday.
As Coke Shakes Up Energy Drink Category, Monster Earns A Downgrade
Photo by Marcus Quigmire/Wikimedia.
Latest Ratings for MNST
|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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