Monster Beverage Corp Receives a Hold from Jefferies

By Ryan Adsit

Jefferies analyst Kevin Grundy reiterated a Hold rating on Monster Beverage Corp (NASDAQ: MNST) today and set a price target of $160. The company’s shares closed yesterday at $140.21.

Grundy noted:

“We are lowering our FY16-18 EPS est. by 4% following a soft 3Q, as a number of factors (many transitory, some less clear) weighed on results. MNST’s Oct. gross sales update (~17% selling day adj.) was encouraging and should mitigate some topline worries around 3Q. We remain favorably predisposed to MNST, though remain on the sidelines following a choppy 3Q, given the stock’s premium multiple at 32x EV/ULFCF (vs. 21.5x staples avg). Hold, PT to $160. MNST posted a soft quarter as the co. delivered 2% growth in the US and 12% growth in int’l as MNST’s revs came in -3.7% below Street est. GM % was worse (63.8% vs. Street 64.4%) and total SG&A was higher (27.0% vs. Street 22.9%), as the co. stepped up investment behind endorsements and the strategic acquired brands. EBITDA of $299M came in well below Street est. (-14%) and EPS of $0.99 missed Street est.”

According to, Grundy is a 3-star analyst with an average return of 1.4% and a 55.0% success rate. Grundy covers the Consumer Goods sector, focusing on stocks such as Spectrum Brands Holdings, Estee Lauder Companies, and Edgewell Personal Care.

Currently, the analyst consensus on Monster Beverage Corp is Moderate Buy and the average price target is $165.33, representing a 17.9% upside.

In a report released yesterday, Susquehanna also reiterated a Hold rating on the stock with a $132 price target.

The company has a one year high of $166.50 and a one year low of $113.08. Currently, Monster Beverage Corp has an average volume of 834K.

Based on the recent corporate insider activity of 23 insiders, corporate insider sentiment is negative on the stock. Most recently, in August 2016, Thomas J. Kelly, the SVP – Monster Energy Co. of MNST sold 10,000 shares for a total of $1,596,600.

Monster Beverage Corp. is a holding company which engages in the development, marketing, sale, and distribution of energy drink beverages and concentrates. It operates through the following segments: Finished Products, Concentrate, and Other. The Finished Products segment consists of the Monster Energy drink products. The Concentrate segment involves the supply of concentrates for the Strategic Brands energy drinks. The Other segment includes brands disposed of as a result of the transaction with The Coca-Cola Company. It offers its products primarily under the brands Monster Energy, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, Muscle Monster, Mega Monster Energy, Punch Monster, Juice Monster, M3, Ubermonster, BU, Nalu, NOS, Full Throttle, Burn, Mother, Ultra, Play and Power Play, Gladiator, Relentless, Samurai, and BPM. The company was founded on April 25, 1990 and is headquartered in Corona, CA.