Jefferies Upgrades Monster Beverage to ‘Buy’



Price movement

Monster Beverage (MNST) has a market cap of $25.8 billion. It rose 4.2% to close at $45.37 per share on December 21, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.1%, 4.1%, and -8.6%, respectively, on the same day. MNST is trading 2.1% above its 20-day moving average, 0.38% below its 50-day moving average, and 6.4% below its 200-day moving average.

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Related ETF and peers

The Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) invests 2.8% of its holdings in Monster Beverage. The YTD price movement of RHS was 3.6% on December 21. The market caps of Monster Beverage’s competitors are as follows:

  • The Coca-Cola Company (KO) — $178.5 billion
  • PepsiCo (PEP) — $150.6 billion
  • Dr Pepper Snapple Group (DPS) — $16.6 billion

MNST’s rating

On December 21, 2016, Jefferies upgraded Monster Beverage’s rating to “buy” from “hold” and set the stock’s price target at $58 per share.

Performance of Monster Beverage in 3Q16

Monster Beverage reported 3Q16 net sales of $788.0 million, a rise of 4.2% over the net sales of $756.6 million in 3Q15. The company’s gross profit margin expanded 230 basis points, and its operating margin narrowed 160 basis points between 3Q15 and 3Q16.

Its net income and EPS (earnings per share) rose to $191.6 million and $0.99, respectively, in 3Q16, compared with $174.6 million and $0.84 in 3Q15.

Monster Beverage’s cash and cash equivalents fell 84.3% and its inventories rose 7.5% between 3Q16 and 4Q15. Next, we’ll look at The Hershey Company (HSY).


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