Monster Beverage Leverages Functional, Zero-Sugar Innovations To Capture Energy Drink Market Growth

Monster Beverage Corporation (NASDAQ:MNST) shares are trading higher on Friday.

On Thursday, the company reported second-quarter results, where net sales increased 11.1% to $2.11 billion from $1.90 billion in the same period last year.

Goldman Sachs analyst Bonnie Herzog reiterated the Buy rating on Monster, raising the price forecast from $72 to $73.

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Herzog said expectations were elevated for Monster Beverage’s second-quarter results due to rapidly accelerating industry scanner data and well-received pipeline innovations, although tempered by concerns over rising aluminum costs.

The analyst added that despite these factors, MNST outperformed forecasts with “very strong” topline growth.

Herzog observed that the global energy drink segment continues to expand, driven by functional and zero-sugar innovations, with potential share gains from RTD coffee and alcohol, while lower year-over-year gas prices (~-10% in July) and normalized summer weather support strong consumption trends.

The analyst also pointed out that Monster Beverage’s well-paced pipeline, including Ultra Wild Passion in the fourth quarter and a new hard lemonade line launched in July, will help sustain healthy topline growth and navigate “challenging” year-to-year comparisons next year.

Herzog said Monster Beverage remains one of his top picks due to its standout 17.5% volume growth in the second quarter and multiple growth drivers, new innovations, international expansion, pricing and mix improvements, and supply-cost optimizations.

The analyst added that trading at a ~52% forward P/E premium to Staples (below its three-year average of ~54%) makes Monster Beverage’s valuation especially attractive given its faster volume-driven growth profile.

Herzog said that following the second-quarter EPS beat, they’re raising their fiscal year 2025 and fiscal year 2026 EPS estimates by $0.03 to $1.89 and $2.14, respectively.

Price Action: MNST shares are trading higher by 6.56% to $64.77 at last check Friday.

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