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Investing.com - UBS has reiterated its Neutral rating and $72.00 price target on Monster Beverage (NASDAQ:MNST) ahead of the company’s third-quarter earnings report scheduled for November 6. Currently trading at $66.48, the stock is slightly above its InvestingPro Fair Value, with a P/E ratio of 41.43 reflecting its premium positioning in the beverage sector.
The beverage company has outperformed the Consumer Staples Select Sector SPDR Fund (XLP) by 11.7% since its last quarterly report, driven by continued momentum in U.S. and European tracked data, according to UBS. This performance aligns with Monster’s impressive 26.66% year-to-date price return, significantly outpacing many consumer staples peers.
UBS expects Monster to be among the few Consumer Staples companies this earnings season to deliver strong organic growth, solid margin expansion despite aluminum tariff headwinds, and clear fundamental visibility on future performance. InvestingPro data shows Monster’s impressive gross profit margin of 55.18%, supporting UBS’s margin expansion thesis despite cost pressures.
The firm projects earnings per share of $0.48 for the third quarter, in line with Visible Alpha consensus estimates, noting that energy drink category growth remains robust with further innovation on the horizon. For the full fiscal year 2025, analysts expect EPS to reach $1.90, according to InvestingPro forecasts, which offers 11+ additional ProTips and comprehensive financial metrics in its Pro Research Report.
While Monster currently trades at approximately 108% premium to beverage peers versus its long-term average of 39%, UBS believes this premium is warranted given the company’s strong top and bottom line delivery, though further upside would require positive estimate revisions beyond the already projected 11% EPS growth for fiscal year 2026. With a "GREAT" overall financial health score of 3.18 from InvestingPro, Monster’s solid fundamentals help explain its sustained premium valuation despite trading above Fair Value estimates.
In other recent news, Monster Beverage reported its second-quarter 2025 earnings, surpassing analyst expectations. The company achieved an earnings per share of $0.52, exceeding the forecasted $0.48, while its revenue reached $2.11 billion, above the anticipated $2.08 billion. Following these results, several analysts have adjusted their price targets for Monster Beverage. RBC Capital raised its target to $75, citing improved market share momentum, while maintaining an Outperform rating. CFRA increased its target to $65, highlighting strong volume growth with a notable 17.5% jump in case volumes for Q2. RBC Capital had previously raised its target to $68, praising the company’s robust topline momentum and strong margins. Morgan Stanley also increased its target to $74, noting that the earnings per share exceeded expectations by 7.2% and gross margins beat estimates by 115 basis points. These developments reflect a positive outlook from analysts on Monster Beverage’s recent performance.
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