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Insights into Monster Beverage’s Mixed 2Q17 Results

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Part 4
Insights into Monster Beverage’s Mixed 2Q17 Results PART 4 OF 5

How the Markets Reacted to Monster Beverage’s 2Q17 Results

Market reaction

Monster Beverage (MNST) stock fell 1.1% to $52.03 on August 9, 2017, in reaction to the company’s 2Q17 results. The company announced its 2Q17 results after the close of the financial markets on August 8, 2017. As we saw in the previous parts of this series, Monster Beverage’s sales exceeded analysts’ expectations, but the company’s earnings lagged the consensus analysts’ earnings estimate in 2Q17.

How the Markets Reacted to Monster Beverage’s 2Q17 Results

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YTD movement

As of August 9, 2017, Monster Beverage stock has risen 17.3% on a YTD (year-to-date) basis. The stock has outperformed the S&P 500 Index and its nonalcoholic beverage peers on a YTD basis.

As of August 9, 2017, the S&P 500 Index has risen 10.5% since the start of 2017. The stock prices for Coca-Cola (KO), PepsiCo (PEP), and Dr Pepper Snapple (DPS) have returned 10.0%, 11.5%, and -0.40% on a YTD basis.

Impact on valuation

Monster Beverage’s 12-month forward PE (price-to-earnings) ratio fell 1.3% to 32.9x on August 9, 2017, in reaction to the company’s 2Q17 results. The company is trading at a higher multiple compared to its nonalcoholic beverage peers. As of August 9, Coca-Cola, PepsiCo, and Dr Pepper Snapple were trading at 12-month forward PE multiples of 23.9x, 22.1x, and 19.2x, respectively.

Currently, analysts expect Monster Beverage’s sales to rise 11.2% to $3.4 billion in 2017. The company’s adjusted EPS (earnings per share) is expected to rise 13.9% to $1.48 in 2017.

We’ll take a look at analysts’ recommendations for Monster Beverage stock in the next part of this series.

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