Monster Beverage is ‘top pick’ in staples at AllianceBernstein
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Monster Beverage Corporation (NASDAQ:MNST) has gained a new bull on Wall Street after an upgrade from AllianceBernstein. 

Callum Elliott, the analyst covering the stock for the New York-based investment management and research firm, offered a mea culpa of sorts in a new note. He noted that while he had been skeptical of the stockâs trajectory to start 2022 in assigning a âHoldâ rating, rapid performance improvement in the spring has changed his tune.

â[Monster Beverage Corporation] (MNST) is a great business; essentially a capital light, branding company, with incredible brand equity that supports super-premium price points and elevated profitability as a result,â Elliott wrote in his upgrade. âWe estimate that MNST generates 50%+ incremental ROIC, unparalleled in the CPG space.â

He upgraded shares from âMarket Performâ, a âHoldâ equivalent, to âOutperformâ and raised his price target from $97 to $110. 

â[Monster Beverage Corporation] (MNST) is our new top pick across our staples coverage,â Elliott concluded. 

To be sure, the issues that prompted his previous âHoldâ rating remain. These headwinds include increasing commodity costs, a hit to sentiment on the company, and confusing and uncertain rumors about a potential tie-up with Constellation Brands (STZ). 

Nonetheless, he sees this noise as reaching a peak pitch. From this point, Elliott sees growth re-accelerating as market share stabilizes and the company is able to lift prices to mitigate inflation.

âWe think that MNST is likely approaching the peak of this cost hill,â he concluded. âAluminum appears to have finally peakedâ¦which means that [the second half of 2022] should see an end to some of these exceptional costs.â

Shares rose about 1% shortly before Wednesdayâs market open on the bullish review. 
Read more on anticipated winners in the consumer staples space, per Wells Fargo.