Here's Why You Must Buy Monster Beverage (MNST) Stock Now - Yahoo Finance

Monster Beverage Corporation MNST has been witnessing momentum due to robust demand for its energy drinks category and a steady line-up of product launches. The company continues to gain from pricing efforts, which have been boosting the top line.

In first-quarter 2023, the company launched many products and expanded distribution in the international markets. It continued to implement price hikes with additional price hikes planned in a number of other markets throughout the remainder of the year.

Backed by these trends, Monster Beverage’s top and bottom lines beat the Zacks Consensus Estimate and grew year over year in first-quarter 2023.

Consequently, shares of this Zacks Rank #1 (Strong Buy) company have rallied 30.5% in a year, outpacing the industry’s growth of 9.5%. The stock also compared favorably against the sector’s decline of 2.5%. Notably, the S&P 500 has grown 3.3% in the same period.

The Zacks Consensus Estimate for Monster Beverage’s 2023 sales and earnings suggests growth of 12.5% and 38.4%, respectively, from the year-ago period’s reported numbers.

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Growth Drivers

Monster Beverage’s continued momentum in the energy drinks category remains a key growth driver. It is on track with price increases to wean the ongoing cost pressures.

In first-quarter 2023, the Monster Energy Drinks segment's net sales increased 11.2% year over year. On a currency-adjusted basis, net sales for the segment rose 14.6%. According to Nielsen, sales for the energy drinks category, including energy shots, increased 12.7% year over year for the 13 weeks ended Apr 22, 2023.

Product innovation plays a significant role in the company's success. Monster Beverage is committed to product launches and innovation to boost growth. In first-quarter 2023, the company launched many products and expanded distribution in the international markets.

At the end of the first quarter, the company initialized the phased launch of Monster Tour Water, a pure unflavored water line, in still and sparkling variants, in the United States. In EMEA, as part of an ongoing pan-EMEA launch, the company distributed Monster Energy Lewis Hamilton 44 Zero Sugar. It also launched Fury, its affordable energy brand, in Egypt in the said quarter. The company revealed plans to transition the Monster brand to the Coca-Cola distribution system in the Philippines.

In fourth-quarter 2022, the company launched several products and expanded distribution in the international markets. In the United States, MNST launched Monster Energy Zero Sugar at retail in January 2023, along with the introduction of Monster Energy Ultra Strawberry Dreams, Monster (stylized) Reserve Kiwi Strawberry, Monster Energy Nitro Cosmic Peach and Java Monster Caffe Latte in early February.

Monster Beverages has been implementing price hikes since the first half of 2022. Also, it implemented price hikes in the first quarter of 2023, with additional price hikes planned in several other markets through the remainder of the year. In some markets, this rise is in addition to the price increases implemented in 2022. In the United States, management implemented an additional price increase on its 18.6 oz and 24 oz energy drinks, effective Apr 1, 2023.

Bottom Line

Monster Beverages appears well-placed for further growth despite rising costs, driven by the introduction of innovative products across the Monster family to suit consumers’ needs, as well as strength in its energy drinks category.

Other Stocks Worth a Look

Some other top-ranked food stocks are Coca-Cola FEMSA KOF, PepsiCo Inc. PEP and Molson Coors TAP.

Coca-Cola FEMSA has an expected EPS growth rate of 13.5% for three to five years. KOF has a trailing four-quarter negative earnings surprise of 33.8%, on average. Shares of KOF have rallied 46.3% in the past year.

The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and earnings per share suggests growth of 19.5% and 14.6%, respectively, from the year-ago period’s reported figures. KOF currently flaunts a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

PepsiCo has a trailing four-quarter earnings surprise of 6.3%, on average. It currently carries a Zacks Rank #2 (Buy). Shares of PEP have gained 10.6% in the past year.

The Zacks Consensus Estimate for PepsiCo’s current financial-year sales and earnings suggests growth of 4.9% and 7.5%, respectively, from the year-ago period's reported figures. PEP has an expected EPS growth rate of 7.8% for three to five years.

Molson Coors currently has a Zacks Rank #2. TAP has a trailing four-quarter earnings surprise of 32.1%, on average. Shares of TAP have rallied 16.7% in the past year.

The Zacks Consensus Estimate for Molson Coors’ current financial-year sales and earnings suggests growth of 5.3% and 5.9%, respectively, from the year-ago period’s reported figures. TAP has an expected EPS growth rate of 4.2% for three to five years.

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