Monster Beverage Corp (MNST)

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Monster Beverage premium to Coke warranted on 'superior growth profile' - HSBC
By: Investing.com | August 14, 2023

Monster Beverage (NASDAQ:MNST) was started with a Buy rating and $72 price target at HSBC on Monday, with analysts stating the company offers "bang for your buck."

Analysts' play on words refers to Monster's acquisition of Bang Energy. A subsidiary of Monster purchased all of the assets of Vital Pharmaceuticals, Inc. (Bang Energy) and certain of its affiliates for approximately $362 million.

"Monster’s purchase of Bang addresses a missing growth driver: recruiting women into a category that typically skews male 60-40," said analysts.

Furthermore, the analysts stated that their analysis of LatAm Coke bottlers suggests room for over 15% five-year revenue CAGR for the region.

"Over the next decade, LatAm and EMEA together could become a revenue source larger than the current size of Monster’s North American business. We project c20% revenue CAGR in local currencies over the next five years in LatAm and c10% revenue CAGR over the next decade in EMEA," added analysts.

They concluded that MNST trades at a 20% premium to Coca-Cola (NYSE:KO), but it is warranted due to "its superior growth profile."

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