Susquehanna 'Skeptical' On Monster, Initiates With Neutral Rating

In a report published Tuesday, Susquehanna analysts initiated coverage of

with a Neutral rating and a price target of $127. Monster has entered into an agreement with

, following which its beverages would be distributed globally through the KO system. This could open "a bigger door to markets overseas, especially Asia," the analysts said. The KO transaction could also "boost profitability for MNST." Monster's current share price "implies the top line pace will double," the analysts pointed out, while adding, "Owing to potential disruptions during the transition (changing distributors/systems), we predict disappointing sales trends in 2015, and are skeptical that the KO system, based on its mixed tracked record outside CSDs, will give the Monster brand a meaningful boost."