2023-06-08 09:49:41 ET
Piper Sandler started coverage of Monster Beverage ( NASDAQ: MNST ) on Thursday with a Neutral rating, advising clients that the current valuation accounts for much of the expected earnings growth ahead.
The firm’s team indicated that a solid core brand and “strong innovation pipeline in both energy drinks and alcohol” to drive sales while gross margins should recover as cost-inflation eases. However, the path for EPS and sales growth are balanced by a lofty valuation at present, in their view.
“We believe MNST will continue to deliver strong top-line growth and drive gross margin recovery. However, given current valuation and a multiple well above its historical average, we see only modest likely upside to the shares near-term and remain on the sidelines for now,” the team concluded. “In the energy drink category, we prefer [Celsius Holdings’] ( CELH ) outsized near-term growth relative to its valuation.”
More on Celsius Holdings:
For further details see:
Monster Beverage’s strong growth prospects likely priced in - Piper Sandler