Monster Beverage rises as Piper Sandler upgrades
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Monster Beverage Corporation (NASDAQ:MNST) rose 2% on Monday morning after Piper Sandler upgraded shares.
The firm bumped the beverage maker to Overweight from Neutral and increased the price target to $63 from $60.
âWhen we initiated coverage roughly two months ago, valuation was our only real hesitation, and we now consider the risk/reward to be more attractive,â Piper Sandler said in a note. âIts 2Q23 results were below expectations, but there is nothing concerning about the business or its near and long-term momentum.â
Piper Sandler remains âbullish on the energy drink category specificallyâ and expects MNST to continue to be well-positioned.
MNST has a strong innovation pipeline in energy drinks and alcohol, the firm said, raising its 2023 estimated EPS to $1.51 to $1.60 compared to the consensus of $1.53.
Last week, Monster Beverage (MNST) reported second-quarter revenue of $1.85B that missed the average analyst estimate by $20M. Net changes in foreign currency exchange rates had an unfavorable impact on net sales.
The beverage company said it has increased prices internationally with additional price increases planned in a number of other markets during the remainder of the year.
âMNST has strong brand equity, a robust innovation pipeline and is active in M&A,â Piper Sandler said.
Gross margins should improve as inflation eases and pricing holds.
âIf margins improve more quickly than we model, there may be more upside to the stock than we expect, though we recognize that one risk is relatively little transparency or guidance from management,â Piper Sandler said.
The stock has 11 Strong Buy ratings from Wall Street analysts, four Buys, eight Holds and one Sell.
MNST is up 10% this year so far.
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Monster Beverage Corporation (MNST) Q2 2023 Earnings Call Transcript