Stifel maintains Buy rating on Monster Beverage stock, $59 target

On Friday, Stifel analysts reiterated their Buy rating on Monster Beverage (NASDAQ:MNST) with a steady price target of $59.00. The reaffirmation follows Monster Beverage’s fourth-quarter 2024 earnings release, which presented sales and EBIT figures that surpassed consensus expectations. The company, currently valued at $53.26 billion, maintains a "GREAT" financial health score according to InvestingPro analysis, with particularly strong metrics in profitability and cash flow management. The company’s U.S. sales saw a modest increase of approximately 1%, which was slightly under the roughly 2% growth observed in scanner data tracked channels. However, international sales were the highlight, delivering a strong year-over-year foreign exchange neutral growth of 20%, marking an acceleration both sequentially and on a two-year compound annual growth rate basis.

Monster Beverage’s gross margin was a key factor in the EBIT outperformance, reported at 55.5% versus the consensus prediction of 54.9%, building on its robust trailing twelve-month gross margin of 53.77%. The company indicated that its hedging strategies are expected to provide some protection against the rising costs of aluminum throughout 2025. InvestingPro data reveals the company holds more cash than debt on its balance sheet, providing additional financial flexibility. Subscribers can access 10+ more exclusive ProTips and detailed valuation metrics. Despite encountering challenges such as adverse weather and wildfires in the U.S., Monster Beverage’s sales in January 2025 increased by 1.5%, although this was below the first-quarter consensus forecast of 4%.

The Stifel report expressed a positive view of these results, particularly emphasizing the acceleration in international sales and the higher than anticipated gross margin. The analysts at Stifel predict that U.S. sales growth will gain momentum throughout 2025, bolstered by favorable comparisons, pricing strategies, and product innovation. They also forecast that gross margins could improve in the face of inflationary pressures, potentially aided by additional pricing actions. While Stifel’s estimates for Monster Beverage’s performance in 2025 and 2026 remain largely unchanged, as does their recommendation to Buy, InvestingPro’s Fair Value analysis suggests the stock is currently trading slightly above its intrinsic value. For comprehensive analysis including valuation models and detailed financial metrics, access the full Pro Research Report, available exclusively to subscribers.

In other recent news, Monster Beverage Corporation reported its fourth-quarter revenue, surpassing analyst expectations with $1.81 billion, slightly above the consensus estimate of $1.8 billion. The company saw a 4.7% increase in net sales year-over-year, or 7.8% when adjusted for foreign currency. However, adjusted earnings per share fell short of projections, coming in at $0.38 against the expected $0.40, remaining flat compared to the previous year. Monster Beverage’s gross profit margin improved to 55.5% from 54.5% in the same quarter of the previous year, aided by reduced input costs. The company implemented a 5% price increase on most of its brands in the U.S., effective November 1, 2024, contributing to their strong results. Sales outside the U.S. rose 11.7% to $711.5 million, making up 39.3% of total net sales, up from 36.8% in the prior year. Monster Beverage faced additional impairment charges of $130.7 million in its Alcohol Brands segment due to underperformance. Despite the earnings miss, the revenue beat was a focal point for investors.

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