Bank of America has increased its price target for Monster Beverage (MNST, Financial) to $66, up from the previous target of $57, while maintaining a Buy rating on the company's stock. This decision is backed by revised expectations for the company's sales performance in the first quarter.
The firm has adjusted its Q1 sales projection upward by approximately 50 basis points, now anticipating sales of $1.95 billion. This revision is largely driven by a projected 9% increase in organic sales growth, an increase from the previously expected 8%. The stronger sales performance is mainly attributed to higher sales in North America, though this is slightly offset by reduced organic sales in the EMEA region.
Despite these changes in sales expectations, Bank of America upholds its earnings per share (EPS) estimates for Monster Beverage. The firm continues to project an EPS of 47 cents for the first quarter and $1.91 for the full fiscal year 2025. Bank of America remains confident that the company's EPS for the year will be largely shielded from potential downward revisions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for Monster Beverage Corp (MNST, Financial) is $58.24 with a high estimate of $71.00 and a low estimate of $47.00. The average target implies an downside of 0.61% from the current price of $58.59. More detailed estimate data can be found on the Monster Beverage Corp (MNST) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, Monster Beverage Corp's (MNST, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Monster Beverage Corp (MNST, Financial) in one year is $69.29, suggesting a upside of 18.26% from the current price of $58.59. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Monster Beverage Corp (MNST) Summary page.
MNST Key Business Developments
Release Date: February 27, 2025
- Net Sales: $1.81 billion in Q4 2024, a 4.7% increase from $1.73 billion in Q4 2023.
- Gross Profit Margin: 55.3% in Q4 2024, up from 54.2% in Q4 2023.
- Operating Income: Decreased 12.2% to $381.2 million in Q4 2024 from $434 million in Q4 2023.
- Adjusted Operating Income: Increased 7.9% to $517.9 million in Q4 2024 from $480.1 million in Q4 2023.
- Net Income: $270.7 million in Q4 2024, down from $367 million in Q4 2023.
- Adjusted Net Income: $375.7 million in Q4 2024, compared to $402.4 million in Q4 2023.
- Diluted Earnings Per Share: Decreased to $0.28 in Q4 2024 from $0.35 in Q4 2023.
- Adjusted Diluted Earnings Per Share: Consistent at $0.38 for both Q4 2024 and Q4 2023.
- Operating Expenses: $621.2 million in Q4 2024, up from $504.4 million in Q4 2023.
- Effective Tax Rate: 29.9% in Q4 2024, up from 18.5% in Q4 2023.
- Net Sales Outside the US: $711.5 million, 39.3% of total net sales in Q4 2024.
- Foreign Currency Impact: Negative impact of $52.3 million on net sales in Q4 2024.
- Alcohol Brands Segment Sales: $34.9 million in Q4 2024, a decrease of 0.8% from Q4 2023.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Monster Beverage Corp (MNST, Financial) achieved record fourth quarter net sales of $1.81 billion, a 4.7% increase from the previous year.
- The energy drink category continues to grow globally, with significant growth in regions such as EMEA (14.4%), APAC (11.8%), and LATAM (20.2%).
- Gross profit as a percentage of net sales increased to 55.3% in the fourth quarter, up from 54.2% in the previous year.
- Monster Beverage Corp (MNST) is expanding its innovation pipeline with new product launches across various regions, including Monster Ultra Peachy Keen in Brazil and Monster Juiced Aussie Lemonade in EMEA.
- The company is optimistic about the long-term prospects for the Monster brand in China and India, with plans for further expansion of the Predator brand.
Negative Points
- Operating expenses increased significantly to $621.2 million in the fourth quarter, primarily due to impairment charges and increased payroll expenses.
- Net income for the fourth quarter decreased to $270.7 million from $367 million in the previous year.
- The effective tax rate increased to 29.9% in the fourth quarter, up from 18.5% in the previous year, impacting net income.
- Sales of certain energy drink brands, such as Reign and Full Throttle, experienced declines in the latest reporting periods.
- The company faced challenges in the alcohol brands segment, with net sales decreasing and impairment charges impacting profitability.
