On Thursday, BNP Paribas (OTC:BNPQY) Exane adjusted its outlook on Monster Beverage (NASDAQ: MNST), reducing the price target to $45 from the previous $46 while maintaining an Underperform rating on the stock. According to InvestingPro data, the stock currently trades at a P/E ratio of 32.24x, with analyst targets ranging from $40 to $63. The revision reflects concerns over the slowing growth in Monster Beverage’s international business, which accounts for 40% of sales and under 70% of the company’s growth.
The firm highlighted that the energy drink maker’s international business is a critical aspect of the negative thesis held by the analyst, paired with market share challenges in the United States. Despite some investors focusing on the sequential progress in the U.S. industry, the analyst believes this perspective overlooks the deceleration of growth abroad. InvestingPro analysis shows the company maintains a strong financial health score of GOOD, with a current ratio of 3.13x indicating robust liquidity.
According to the analysis by BNP Paribas Exane, Monster Beverage’s share gains in key markets have significantly slowed to approximately 55 basis points year-over-year in 2024, compared to the annual rate of about 200-250 basis points from 2015 through 2023. This slowdown comes as the company’s revenue growth has moderated to 7.05% over the last twelve months.
For deeper insights into Monster Beverage’s performance metrics and 10+ additional ProTips, consider accessing the comprehensive research available on InvestingPro. This slowdown is a central factor in the revised price target and underpins the analyst’s reservations about the stock’s performance.
The firm also pointed out the potential risks to the consensus estimates and Monster Beverage’s price-to-earnings (P/E) multiple of 30 times. The adjusted earnings per share (EPS) estimates for fiscal years 2025-2026 have been trimmed by roughly 3%, indicating a 14% downside to the new price target, with current EPS forecast for FY2024 standing at $1.71.
This adjustment is based on the detailed assessment of the company’s international market position and growth trajectory.
In other recent news, RBC analysts have spotlighted Primo Brands, Chewy (NYSE:CHWY), and Planet Fitness (NYSE:PLNT) as their top picks across various consumer and retail sectors.
Primo Brands was noted for its potential upside from its merger with Blue Triton, while Chewy and Planet Fitness were recognized for their market potential and successful operational strategies, respectively.
In the meantime, Monster Beverage Corporation (NASDAQ:MNST) experienced a slight setback with BMO Capital Markets reducing its price target to $53 due to operational challenges and softer sales. However, the firm maintained its Market Perform rating, indicating continued confidence in the company’s long-term growth potential.
In terms of earnings and revenues, Monster Beverage reported a modest increase in net sales for the third quarter of 2024, despite challenges such as the impact of Hurricane Helene on its brewery operations and increased operating expenses. The company also reported a decrease in net income and earnings per share, but remained optimistic about the growth of the energy drink market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.