Stryker shares tumble despite strong Q2 results and raised guidance
On Wednesday, Piper Sandler affirmed a Neutral rating on Monster Beverage (NASDAQ:MNST) stock, maintaining a price target of $51.00, below the current trading price of $54.59. According to InvestingPro data, analyst consensus remains moderately bullish with price targets ranging from $40 to $64, while the company’s market capitalization stands at $53 billion. The firm’s commentary highlighted that Monster Beverage is witnessing an uptick in retail momentum within the United States, and the anticipated costs appear to be manageable. Following a discussion with Monster Beverage’s co-CEO, Hilton Schlosberg, the analysts obtained additional insights into the company’s operations.
The latest convenience store (C-store) scanner data indicates that sales growth for Monster Beverage is accelerating. This data shows an increase in all-channel sales growth momentum, with a 3.1% rise in the four weeks ending February 23, 2025, compared to a 1.9% increase in the four weeks ending January 26, 2025. The data, provided by SPINS/IRI, also reveals shifts in sales channels, with C-stores experiencing faster growth.
Monster Beverage’s exposure to tariffs is expected to be manageable due to the fact that only a third of its can cost is attributed to aluminum. The company also has the option to adjust pricing if necessary. InvestingPro analysis shows impressive gross profit margins of 54.04% and a strong financial health score of 3.22 (rated as "GREAT"), indicating effective cost management. The gross margin is influenced by various factors including the growth of sugar-free products, which is a positive, and international expansion, which has a negative impact. Additionally, while pricing changes are beneficial, they are somewhat offset by increased promotional discounts.
The analysts noted that channel shifting is ongoing, with C-stores gaining momentum. According to Monster Beverage’s scanner data, the category saw a 4.1% increase in the latest four-week period and an 8.5% surge in the latest one-week period.
The report from Piper Sandler comes as Monster Beverage continues to navigate the complexities of the retail landscape, balancing growth opportunities against cost management strategies. For deeper insights into Monster Beverage’s financial health, valuation metrics, and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which is part of the platform’s coverage of over 1,400 US stocks.
In other recent news, Monster Beverage Corporation reported fourth-quarter revenue of $1.81 billion, surpassing analyst expectations of $1.8 billion. This revenue growth was driven by a 4.7% year-over-year increase, or 7.8% when adjusted for foreign currency fluctuations. However, the company’s adjusted earnings per share were $0.38, falling short of the projected $0.40. Monster Beverage’s gross profit margin improved to 55.5%, attributed to reduced input costs despite some geographical sales mix challenges. International sales showed robust growth, with net sales outside the U.S. rising 11.7% to $711.5 million, which accounted for 39.3% of total net sales. Stifel analysts maintained a Buy rating on Monster Beverage with a price target of $59.00, highlighting the strong international sales and improved gross margins. Additionally, the company announced that Rodney C. Sacks will step down as Co-Chief Executive Officer in June 2025, with Hilton H. Schlosberg assuming the role of sole CEO. Sacks will continue to serve as Chairman of the Board and focus on strategic initiatives until his retirement at the end of 2026.
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