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Monster Beverage cut to sell at Truist as its 'no longer see it as a high growth story'

Published 2024-04-25, 07:52 a/m
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Monster Beverage (NASDAQ:MNST) was double-downgraded to Sell from Buy at Truist and cut to neutral from Overweight at JPMorgan on Thursday ahead of its May 8 results.

Truist slashed its price target for the stock to $46 from $65 in its note, stating that they "no longer see it as a high growth story," despite the view that it is still a great company.

"Second, we believe the Street is too bullish on gross margin recovery for the company despite the structural headwinds to that metric," wrote analysts. "Finally, we see no reason why the stock should continue to hold a super premium multiple to its multinational beverage peers."

JPMorgan analysts lowered the firm's price target for MNST to $59 from $66 per share, saying they see "limited catalysts to the upside at this point."

The "long-hoped for" potential price increases "somehow lost their attractiveness due to the latest run-up in aluminum prices and an already-stretched lower income consumer (per recent comments by companies that reported so far as it relates to the U.S. and Chinese consumer in particular)," wrote the bank.

"Moreover, tracked and untracked channel trends are still challenged and it appears that household penetration and buy rates are pressured per Numerator data."

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