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Monster Beverage (NASDAQ:MNST), currently maintaining impressive gross profit margins of 54.64%, expects a modest impact on margins starting in the third quarter of 2025 due to increased aluminum tariffs, according to UBS.
The energy drink maker, which has delivered a strong 20% year-to-date return, shared this update during its annual shareholder meeting, where management maintained that category growth remains robust in the U.S. alongside solid international growth. The aluminum tariff impact was the only incremental information provided during the meeting. According to InvestingPro, the company’s overall financial health score is rated as "GREAT," with 12 additional key insights available to subscribers.
UBS maintained its Neutral rating and $63.00 price target on Monster Beverage stock. The firm noted that investor sentiment on Monster has remained constructive, primarily due to strong U.S. dollar takeaway performance according to tracked data.
The setup for the second quarter looks increasingly attractive for Monster, UBS observed, citing strong quarter-to-date trends, continued improvement in tracked data, and easier upcoming comparisons for the company in the coming months.
Monster shares currently trade at an 88% premium to U.S. beverage peers compared to a five-year historical average of approximately 35%, which UBS believes indicates much of the positive momentum is already priced into the stock.
In other recent news, Monster Beverage has been the focus of several analyst updates following its recent earnings report and virtual shareholder meeting. The company reported a 9.2% increase in U.S. sales for the second quarter through early June, alongside mid-teens growth internationally on a foreign exchange-neutral basis. However, its first-quarter earnings per share missed estimates by $0.01, with sales growth falling short of market expectations. Despite these challenges, Monster’s management expressed optimism about improving market conditions and the potential for growth, particularly in international markets where the company is gaining share in 73% of regions discussed in earnings calls.
Goldman Sachs raised its price target for Monster Beverage to $72.00, citing the company’s growth outlook and potential for improved gross margins. Stifel also maintained a Buy rating with a $72.00 price target, noting Monster’s innovation plans and international momentum. Meanwhile, RBC remains optimistic about Monster’s long-term potential, despite recent market share challenges in the U.S., and expects recovery by 2026. TD Cowen increased its price target to $60.00 while maintaining a Hold rating, reflecting confidence in Monster’s ability to navigate current market challenges. JPMorgan also raised its price target to $64.00, maintaining a Neutral rating, and anticipates low double-digit top-line growth in the second quarter.
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