Monster Beverage (MNST): Better Than Feared - Stifel
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Stifel analyst, Mark Astrachan, reiterated his Buy rating on shares of Monster Beverage (NASDAQ: MNST) and raised his price target to $185.00 (from $178.00) after Monster reported disappointing 3Q results with sales and EPS below expectations.
The analyst thinks the miss was better than feared, with the difference largely attributable to shipment timing in the U.S. and some sales de-leverage on fixed costs, though certain expenses were higher than anticipated and represent a point worth watching going forward.
On the positive side, the adjusted month of October gross sales, given on the call, meaningfully accelerated from 3Q sales levels – the analyst estimates up 19% – with implied U.S. and international sales improving sequentially. This implies that U.S. end-demand remains solid and accelerating international sales reflect share gains resulting from new Coke distribution.
Despite the weak results last quarter, the analyst is keeping his Buy rating but reducing the 2017-2018 sales and EPS estimates by 0.4% and 4.0%.
The target price drops to $178 representing 33x 2018E EPS, excluding cash.
Shares of Monster Beverage closed at $140.21 yesterday.
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