Monster Beverage (MNST) PT Raised to $185 at Stifel
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Stifel analyst Mark Astrachan reiterated a Buy rating and lifted its price target on Monster Beverage (NASDAQ: MNST) to $185.00 (from $165.00) following Q2 beat.
Astrachan commented, "Monster Beverage Corp. reported 2Q16 results with EPS of $0.99, compared to consensus of $1.03. Net sales growth of 19.3% exceeded consensus of 15.9%, with the EPS miss driven by the exclusion of cost savings from the acquisition of American Fruits & Flavors. Using a normalized gross margin of 65.5%, including the estimated cost savings from AFF which should approximate the run-rate beginning in 3Q16, EPS would have been $1.07. Month of July gross sales, given on the earnings call, increased 2% y/y but were up approximately 12% adjusting for two fewer selling days in July 2016 compared to July 2015."
"We estimate legacy U.S. and constant currency international sales increased 14% and 17%, respectively, indicating global end-demand remains healthy. Outside the U.S., 22% of 2015 sales and distantly the most significant growth opportunity, Monster continues to gain share in nearly all markets as brand awareness increases, aided by expansion via Coke distribution. Relatedly, the company announced it reached distribution agreements with Coke bottlers across most of Latin America, the largest remaining region without a changeover, and said it plans to commence sales in key areas of China as early as the end of 3Q16. Additionally, normalized gross margin continues to expand, with sequential and y/y improvement in all international regions. Taken together, our long-term view that Monster has considerable runway for sales growth from continued share gains of a growing global energy drink market and margin leverage is unchanged."
The firm raised its 2H16 EPS outlook and increase 2017 and 2018 EPS estimates to $4.83 and $5.51, respectively.
Shares of Monster Beverage closed at $158.59 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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