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Reasons Why Monster Beverage (MNST) Should be in Your Portfolio
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Monster Beverage Corporation (MNST - Free Report) stands to benefit from robust demand for its energy drinks, effective pricing actions, product innovations and a healthy balance sheet. The company’s strong distribution network in international markets and investment in growth opportunities also bode well.
This Zacks Rank #2 (Buy) company has a market capitalization of $59.8 billion. In the past three months, it has gained 8.9% compared with the industry’s growth of 2.6%.
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding this company for a while now.
Strong Demand Environment: Monster Beverage has been benefiting from continued momentum in the energy drinks category, driven by a solid demand environment across end markets. For instance, in the first quarter of 2023, sales from the Monster Energy Drinks segment increased 11.2% year-over-year to $1.6 billion. Sales for the energy drinks category, including energy shots, grew 12.7% year over year, while sales for the energy brands, including Reign, rose 10.5% in the 13-week period that ended on Apr 22, 2023.
Focus on Product Innovations & Launches: The company remains focused on launching and innovating new products to boost growth. In the first quarter, MNST introduced several products and expanded its distribution network in international markets.
In the first quarter, the company expanded the distribution of Monster Tour Water in still and sparkling variants across the United States. Also, it introduced Rehab Monster Wild Berry Tea in 16-ounce cans. In Europe, Middle East and Africa (“EMEA”), the company initiated the distribution of Monster Energy Lewis Hamilton 44 Zero Sugar. This apart, it launched Fury, its affordable energy brand, in Egypt in the first quarter.
Some of the other notable product launches made by the company this year include the likes of Monster Energy Zero Sugar, Monster Energy Ultra Strawberry Dreams, Monster (stylized) Reserve Kiwi Strawberry and Java Monster Caffe Latte.
Effective Pricing Actions: Monster Beverage continues to benefit from pricing efforts, which have been boosting the top line. It continued implementing price hikes in the first quarter, with additional price hikes planned in other markets throughout the year. For instance, in the United States, it implemented an additional price increase on its 18.6 oz and 24 oz energy drinks.
Financials & Share Buybacks: Apart from boasting a healthy balance sheet, Monster Beverage remains committed to rewarding shareholders through share repurchases. As of May 4, 2022, the company had $682.8 million remaining under the previously authorized share repurchase plan.
Northbound Estimate Trend: In the past 60 days, the Zacks Consensus Estimate for the company’s 2023 and 2024 earnings have been revised upward by 3.4% and 2.3%, respectively.
Coca-Cola FEMSA has an expected EPS growth rate of 13.5% for three to five years. KOF has a trailing four-quarter earnings surprise of 33.8%, on average.
The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and earnings per share suggests growth of 19.5% and 14.6%, respectively, from the year-ago period’s reported figures.
PepsiCo has a trailing four-quarter earnings surprise of 6.3%, on average.
The Zacks Consensus Estimate for PepsiCo’s current financial-year sales and earnings suggests growth of 4.9% and 7.5%, respectively, from the year-ago period's reported figures. PEP has an expected EPS growth rate of 7.8% for the next three to five years.
Molson Coors has a trailing four-quarter earnings surprise of 32.1%, on average.
The Zacks Consensus Estimate for TAP’s current financial-year sales and earnings suggests growth of 5.9% and 10.7%, respectively, from the year-ago period’s reported figures. TAP has an expected EPS growth rate of 4.3% for the next three to five years.
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Reasons Why Monster Beverage (MNST) Should be in Your Portfolio
Monster Beverage Corporation (MNST - Free Report) stands to benefit from robust demand for its energy drinks, effective pricing actions, product innovations and a healthy balance sheet. The company’s strong distribution network in international markets and investment in growth opportunities also bode well.
This Zacks Rank #2 (Buy) company has a market capitalization of $59.8 billion. In the past three months, it has gained 8.9% compared with the industry’s growth of 2.6%.
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding this company for a while now.
Strong Demand Environment: Monster Beverage has been benefiting from continued momentum in the energy drinks category, driven by a solid demand environment across end markets. For instance, in the first quarter of 2023, sales from the Monster Energy Drinks segment increased 11.2% year-over-year to $1.6 billion. Sales for the energy drinks category, including energy shots, grew 12.7% year over year, while sales for the energy brands, including Reign, rose 10.5% in the 13-week period that ended on Apr 22, 2023.
Focus on Product Innovations & Launches: The company remains focused on launching and innovating new products to boost growth. In the first quarter, MNST introduced several products and expanded its distribution network in international markets.
In the first quarter, the company expanded the distribution of Monster Tour Water in still and sparkling variants across the United States. Also, it introduced Rehab Monster Wild Berry Tea in 16-ounce cans. In Europe, Middle East and Africa (“EMEA”), the company initiated the distribution of Monster Energy Lewis Hamilton 44 Zero Sugar. This apart, it launched Fury, its affordable energy brand, in Egypt in the first quarter.
Some of the other notable product launches made by the company this year include the likes of Monster Energy Zero Sugar, Monster Energy Ultra Strawberry Dreams, Monster (stylized) Reserve Kiwi Strawberry and Java Monster Caffe Latte.
Effective Pricing Actions: Monster Beverage continues to benefit from pricing efforts, which have been boosting the top line. It continued implementing price hikes in the first quarter, with additional price hikes planned in other markets throughout the year. For instance, in the United States, it implemented an additional price increase on its 18.6 oz and 24 oz energy drinks.
Financials & Share Buybacks: Apart from boasting a healthy balance sheet, Monster Beverage remains committed to rewarding shareholders through share repurchases. As of May 4, 2022, the company had $682.8 million remaining under the previously authorized share repurchase plan.
Northbound Estimate Trend: In the past 60 days, the Zacks Consensus Estimate for the company’s 2023 and 2024 earnings have been revised upward by 3.4% and 2.3%, respectively.
Other Stocks to Consider
Some other top-ranked food stocks are Coca-Cola FEMSA (KOF - Free Report) , PepsiCo Inc. (PEP - Free Report) and Molson Coors (TAP - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Coca-Cola FEMSA has an expected EPS growth rate of 13.5% for three to five years. KOF has a trailing four-quarter earnings surprise of 33.8%, on average.
The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and earnings per share suggests growth of 19.5% and 14.6%, respectively, from the year-ago period’s reported figures.
PepsiCo has a trailing four-quarter earnings surprise of 6.3%, on average.
The Zacks Consensus Estimate for PepsiCo’s current financial-year sales and earnings suggests growth of 4.9% and 7.5%, respectively, from the year-ago period's reported figures. PEP has an expected EPS growth rate of 7.8% for the next three to five years.
Molson Coors has a trailing four-quarter earnings surprise of 32.1%, on average.
The Zacks Consensus Estimate for TAP’s current financial-year sales and earnings suggests growth of 5.9% and 10.7%, respectively, from the year-ago period’s reported figures. TAP has an expected EPS growth rate of 4.3% for the next three to five years.