Monster Beverage is called a compelling stock pick by Morgan Stanley
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Morgan Stanley called Monster Beverage (NASDAQ:MNST) a top pick in the beverage sector after boosting both the revenue and margin forecast on the company.
Analyst Dara Mohsenian and team have increased conviction in an EPS growth inflection for MNST after reviewing topline growth drivers, including strong long-term category growth in both the U.S. and internationally. The firm expects sustainable growth for MNST aided by demographic factors which skew to younger consumers, continued international share gains, improving recent U.S. share trends, expanding Numerator household penetration data in the U.S. for MNST and the category, and Morgan Stanley's analysis of historically low demand elasticity to pricing.
Looking ahead, Monster Beverage (MNST) also expect pending U.S. price increases to drive both topline growth, as well as margin recovery.
On a valuation look, Monster Beverage (MNST) is said to look compelling, with the 12% long-term topline growth forecast above the 9% rate the market is pricing in from an implied discounted cash flow standpoint and consensus forecasts.
Morgan Stanley reiterated an Overweight rating on MNST and raised its price target to $117.
Shares of Monster Beverage (MNST) rose 1.88% premarket to $90.50.
Wall Street ratings scorecard on MNSY: 14 Buy-equivalent or higher ratings, 9 Hold-equivalent ratings, and no Sell-equivalent ratings.