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Monster Beverage sinks for second day after analysts express caution

After a significant sell-off yesterday, Monster Beverage (MNST) shares are declining again after analysts at Citigroup and Goldman Sachs released largely cautious assessments of the company in notes to investors earlier today. Citigroup analyst Wendy Nicholson wrote that the company's fundamental outlook has weakened considerably, after The New York Times reported yesterday that five people had died after drinking Monster beverages in the last three years, according to FDA reports. In addition to the legal and regulatory challenges that Monster is facing, the company's rival, Red Bull, is gaining market share, Nicholson wrote, adding that Monster is facing execution challenges in foreign markets. Moreover, the argument for a larger beverage company acquiring Monster has “evaporated,” contended the analyst, who lowered her price target on the shares to $50 from $60. Meanwhile, Goldman removed Monster from its Conviction Buy List, citing increased headline and regulatory risk over the near-term. However, the firm, which now has a Buy rating on the shares, thinks that the company's fundamentals are still intact while significant risk levels are already reflected in the stock. In mid-morning trading, Monster sank $3.01, or 6.58%, to $42.72.