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Factors Affecting Monster Beverage's (MNST) Q1 Earnings

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Monster Beverage Corporation (MNST - Free Report) is slated to release first-quarter 2020 results on Apr 7. In the last reported quarter, it reported a positive earnings surprise of 2.2%. Also, in the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 2.6%, on average.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 48 cents, in line with the prior-year quarter’s reported figure. Notably, the consensus mark has gone down by a penny in the past 30 days. For quarterly revenues, the consensus mark stands at $1,009 million, which suggests growth of 6.7% from the year-ago quarter’s reported number.

Key Factors to Note

Monster Beverage has been grappling with disruptions in its business stemming from the coronavirus outbreak. In this regard, closure or suspension of activities at its various manufacturing facilities due to government-imposed restrictions is likely to have negatively impacted the company’s top line in the first quarter.

Further, unfavorable product mix, increased manufacturing costs and elevated freight costs have been weighing on its margins. Also, the company’s exposure to fluctuations in foreign currency is expected to have been a drag.

Nevertheless, the company remains on track with product launches and innovation to boost growth. Apart from these, continued strength in its energy drinks category, including Reign Total Body Fuel high-performance energy drinks and Reign Inferno thermogenic fuel high-performance energy drinks in the United States and outside, is a significant growth driver. Also, Monster Beverage has been expanding international operations in various markets —China, India, EME, Africa and the Middle Eastern countries. Cumulatively, these might have provided some cushion to the company’s first-quarter results.

Monster Beverage Corporation Price and EPS Surprise

Zacks Model

Our proven model doesn’t conclusively predict an earnings beat for Monster Beverage this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Monster Beverage has a Zacks Rank #4 (Sell) and an Earnings ESP of -4.66%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat:

Beyond Meat (BYND - Free Report) presently has an Earnings ESP of +1.79% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Energizer Holdings (ENR - Free Report) currently has an Earnings ESP of +4.52% and a Zacks Rank #3.

Hormel Foods Corporation (HRL - Free Report) currently has an Earnings ESP of +6.51% and a Zacks Rank #3.

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