Market Overview

Mixed Reviews For Monster's Q2 Beat Amid Industry Slow Down

Share:
Related MNST
Credit Suisse Bullish To Neutral On Beverage/Spirit Names
Coca-Cola Could Remain Range-Bound For 2017; Credit Suisse Initiates At Neutral
My Options Strategy: Q3 2016 (Seeking Alpha)

Monster Beverage's (NASDAQ: MNST) second-quarter earnings beat got mixed reviews from analysts who noted a broad slowdown in the industry that hurt sales.

The non-carbonated soft-drink maker posted earnings of $0.81 per share, $0.06 ahead of expectations. Revenue grew 8.9 percent, including 12 percent internationally and just 6 percent in the United States.

Jefferies' Kevin Grundy, who maintained a Buy rating and $80 target, said although signs of an industry recovery "remain elusive," Monster's recently improved margins are sustainable in the second half of 2014.

Wider margins were responsible for the recent earnings beat and stemmed from lower marketing expense and costs of ingredients as well as a shift to local production for international markets, Grundy said.

Citi's Wendy Nicholson maintained a Neutral rating and said Monster will face difficult year-over -year comparisons for the next three quarters.

"We think it's reasonable for investors to expect U.S. sales growth of 5 percent to 8 percent," Nicolson said in a note Friday.

But Amit Sharma of BMO Capital said fears of a U.S. slowdown are "exaggerated" and the company's 12 percent international growth rate holds "potentially large benefits" in the form of lower taxes and wider margins.

Sharma rates the shares Out Perform with a $77 target.

Monster closed Friday up more than six percent at $69.45 per share.

Latest Ratings for MNST

DateFirmActionFromTo
Sep 2016Credit SuisseInitiates Coverage onOutperform
Aug 2016JefferiesMaintainsHold
Aug 2016CitigroupMaintainsBuy

View More Analyst Ratings for MNST
View the Latest Analyst Ratings

Posted-In: Amit Sharma BMO Capital CitiAnalyst Color Earnings News Guidance Analyst Ratings

 

Related Articles (MNST)

View Comments and Join the Discussion!