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Citi analysts also maintained a $67 per share price target on the stock, revealing that MNST offered an update on recent trends in the energy drink category in the U.S. and internationally, results from recent innovation and provided some color on costs and capital allocation.
“We thought MNST’s tone was generally bullish, particularly around innovation both in its core energy drinks business (with Monster Zero Sugar, Ultra Strawberry Dreams, and Reign Storm) and in the alcohol segment (with the Beast Unleashed and the newly announced ‘Nastea Beast’ hard iced tea innovation, which will compete directly with SAM’s Twisted Tea in the fast-growing hard iced tea FMB segment),” wrote analysts.
“Net, we reiterate our Buy on MNST with strong topline trends in the U.S. and internationally supported by innovation and a solid gross margin recovery in the balance of the year, although we believe multiple upside is more limited post the stock’s strong YTD outperformance.”
At Goldman Sachs, analysts said MNST struck an upbeat and constructive tone.
The firm was “most encouraged” that pricing continues to stick with no adverse impact on volumes, recent innovation is performing well post-launch, MNST continues to innovate, the company remains focused on the continued roll-out of its affordable energy brand Predator internationally, and it, broadly speaking, has sufficient inventory to meet current demand levels.
“MNST remains one of our top stock picks as we believe it’s one of the most attractive growth stories in broader Staples, particularly given its standout volume-led topline growth,” said analysts.
