Monster Beverage is a top pick at Credit Suisse heading into 2023
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Credit Suisse selected Monster Beverage (NASDAQ:MNST) as its top pick in the beverage sector heading into 2023.
Analyst Kaumil Gajrawalakaumil said Monster (MNST) has underearned to support customers and avoid out-of-stocks amid high inflation and supply disruptions. However, he also noted that demand remains strong for the beverage company, elasticities are favorable, and MNST regained market share leadership in the US.
The firm's bullish thesis on MNST hinges on the expectation for high single-digit growth in the U.S. and recovering margins with pricing actions going through and spot commodities easing. Significant international runway for MNST was also highlighted by Credit Suisse, as what is called a robust innovation pipeline for the beverage compamy.
Credit Suisse has an Outperform price target on MNST and price target of $111, which is 32X the firm's 2025 EPS of $4.44 discounted at 8%. On Wall Street, Monster Beverage has 13 Buy-equivalent ratings in comparison to 10 Hold-equivalent ratings and just one Sell-equivalent rating.
Shares of MNST dipped 0.20% in premarket trading on Monday and are essentially flat for the last six weeks. Monster Beverage (MNST) has topped major market indexes for the year with a 4.39% gain.