The Zacks Consumer Staples Sector currently ranks in the bottom 38% of all Zacks Sectors, undoubtedly a ranking that doesn’t inspire confidence.
Typically, an investor should target stocks within the top 50% of all Zacks Sectors.
Studies have shown that 50% of a stock's price movement can be attributed to the group it’s in, making it crucial to ensure that you target stocks in a thriving sector.
With the Consumer Staples sector residing in the bottom 50% of all Zacks Sectors, it further tells us that conditions are challenging for that sector's business currently, causing the analysts following that group to lower their estimates.
And, of course, investors never want to see earnings estimates go down.
One company in the sector, Monster Beverage Corporation (MNST - Free Report) , currently carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of an F.
Let’s take a look at what’s landed the beverage titan in such an unfavorable ranking.
Growth Estimates
Analysts have been overwhelmingly bearish in their earnings outlook over the last several months, pushing the stock into a Zacks Rank #5 (Strong Sell).
The Zacks Consensus EPS Estimate for MNST’s current fiscal year (FY22) resides at $2.29, penciling in a disheartening 11% Y/Y drop in earnings. And for the company’s upcoming quarterly print, earnings are forecasted to slip by nearly 5% year-over-year.
Valuation
Monster Beverage shares carry stretched valuation levels, further bolstered by its Style Score of an F for Value.
The company’s 38.6X forward earnings multiple is undoubtedly expensive, well above its five-year median of 33.1X and reflecting a staggering 92% premium relative to its Zacks Sector.
Earnings Performance
MNST’s bottom-line results have left much to be desired as of late, with the company falling short of the Zacks Consensus EPS Estimate in four of its last six quarters. Just in its latest print, MNST penciled in a steep 25% bottom-line miss.
Bottom Line
Steep valuation levels paired with overwhelmingly negative estimate revisions from analysts paint a grim picture for the company in the short term.
Monster Beverage (MNST - Free Report) is a Zacks Rank #5 (Strong Sell) and a stock that investors will be better off staying away from for now.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – the odds of reaping considerable gains are much higher within the companies that carry these ranks.
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The Zacks Consumer Staples Sector currently ranks in the bottom 38% of all Zacks Sectors, undoubtedly a ranking that doesn’t inspire confidence.
Typically, an investor should target stocks within the top 50% of all Zacks Sectors.
Studies have shown that 50% of a stock's price movement can be attributed to the group it’s in, making it crucial to ensure that you target stocks in a thriving sector.
With the Consumer Staples sector residing in the bottom 50% of all Zacks Sectors, it further tells us that conditions are challenging for that sector's business currently, causing the analysts following that group to lower their estimates.
And, of course, investors never want to see earnings estimates go down.
One company in the sector, Monster Beverage Corporation (MNST - Free Report) , currently carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of an F.
Let’s take a look at what’s landed the beverage titan in such an unfavorable ranking.
Growth Estimates
Analysts have been overwhelmingly bearish in their earnings outlook over the last several months, pushing the stock into a Zacks Rank #5 (Strong Sell).
The Zacks Consensus EPS Estimate for MNST’s current fiscal year (FY22) resides at $2.29, penciling in a disheartening 11% Y/Y drop in earnings. And for the company’s upcoming quarterly print, earnings are forecasted to slip by nearly 5% year-over-year.
Valuation
Monster Beverage shares carry stretched valuation levels, further bolstered by its Style Score of an F for Value.
The company’s 38.6X forward earnings multiple is undoubtedly expensive, well above its five-year median of 33.1X and reflecting a staggering 92% premium relative to its Zacks Sector.
Earnings Performance
MNST’s bottom-line results have left much to be desired as of late, with the company falling short of the Zacks Consensus EPS Estimate in four of its last six quarters. Just in its latest print, MNST penciled in a steep 25% bottom-line miss.
Bottom Line
Steep valuation levels paired with overwhelmingly negative estimate revisions from analysts paint a grim picture for the company in the short term.
Monster Beverage (MNST - Free Report) is a Zacks Rank #5 (Strong Sell) and a stock that investors will be better off staying away from for now.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – the odds of reaping considerable gains are much higher within the companies that carry these ranks.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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