Mixed Reviews For Monster's Q2 Beat Amid Industry Slow Down
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.
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|Apr 2015||Susquehanna||Initiates Coverage on||Neutral|
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