Monster Beverage is viewed cautiously at TD Cowen
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TD Cowen pulled back on its expectations for Monster Beverage (MNST) after sizing up the beverage company's earnings report. Analyst Vivian Azer said the firm tempered its margin outlook on Monster Beverage (MNST) due to the continued outsized growth from lower-cost energy markets as well as margin-dilutive alcoholic beverages.
Monster's (MNST) earnings report included more details on the Bang Acquisition. The California-based company plans to integrate the business both internally, and with the Coca-Cola (KO) distribution system in the U.S. During the earnings call (transcript), Monster Beverage said it is especially excited about the acquisition of the state of the art Bang Energy production facility in Phoenix, Arizona, which it intends to utilize for Bang as well as other products in the Monster portfolio. Of note, MNST will also narrow Bang's portfolio by discontinuing non-core products such as Redline and energy shots. "With a more narrow approach to Bang, the company believes that while it started as a performance energy brand, it now represents more of a lifestyle energy brand," updated TD Cowen analyst Vivian Azer. The loss of distribution for Bang is noted to have weakened its position in the performance energy segment, where MNST's own Reign Storm brand continues to meet expectations. Overall, TD Cowen pulled back on its expectations for Monster Beverage (MNST) after sizing up the beverage company's prospects over the next several quarters. TD Cowen has a Market Perform rating on the stock and a price target of $60.
Shares of Monster Beverage (MNST) are up about 15.5% on a year-to-date basis and trade about 3% above their 200-day moving average.
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