Goldman Sachs Considers Monster Beverage (MNST) A Highly Appealing Investment

On May 22, Goldman Sachs analyst Bonnie Herzog called Monster Beverage Corp. (NASDAQ:MNST) among the most appealing growth opportunities within the consumer staples sector. With that view, he reiterated a Buy rating with a price target of $67.

The analyst estimates that the company will achieve an EPS of $1.86 for FY 2025, which indicates a 25% year-over-year growth and aligns with the current consensus estimates.

Monster Beverage’s Q1 2025 sales, reported in the second week of May, declined 2.3% year-over-year to $1.85 billion and missed consensus expectations. The decline was due to weakness in the Alcohol Brands segment and forex impact, excluding which, the sales were up around 2%. However, better cost management led to a 180 basis point improvement in the adjusted operating margin of 31.5%, and an EPS of $0.47, which was broadly in line with street estimates.

Management noted that sales increased robustly in April, which bodes well for the next quarter. Moreover, the company is focusing on margin improvement using pricing strategies and supply chain improvements. At the results call, Chairman and Co-CEO Rodney C. Sacks, stated:

“We launched a number of new products in the first quarter. In the United States, Monster Energy Ultra Blue Hawaiian has rapidly become one of our top selling products. Innovation globally continues to play a key role in our strategy and we maintain a robust innovation pipeline.”

With better revenue growth supported by innovation, Bonnie Herzog believes that the company has substantial scope to grow its gross profit and, in turn, earnings.

Monster Beverage Corp. (NASDAQ:MNST), through its subsidiaries, develops and markets energy drinks, including Monster Energy drinks.

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Disclosure: None.