Monster Beverage lands bull rating from HSBC with growth catalysts in the mix
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HSBC started of coverage on Monster Beverage Corporation (NASDAQ:MNST) with a Buy rating on its view that new international markets and the acquisition of Bang will address missing growth drivers for the beverage company.
Analyst Carlos Laboy said that Monster's (MNST) new labels and acquired brands should support the recruitment of female consumers in the U.S. and change the current heavy skew of male customers. He noted that earlier this year Monster launched Reign Storm under the umbrella of its four-year-old Reign performance energy drink line. "Reign Storm was designed to target female consumers in search of a health-focused energy drink," stated Laboy. The recent addition of Bang Energy also is seen targeting more female customers. "Bang should help Monster further pull ahead of Red Bull in the race for US energy beverage leadership," tipped Laboy.
HSBC also sees the entry by the California-based company into alcoholic ready-to-drink beverages in the U.S. and Canada as a growth catalyst. The segment is seen as an important growth opportunity for a brand already relevant in nighttime accounts, as the lines between alcoholic and non-alcoholic beverages blur.
Shares of Monster Beverage rose 0.89% premarket to $58.70 vs. the 52-week trading range of $42.81 to $60.47. Short interest on MNST stands at 1.60% of the total float.
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