Please ensure Javascript is enabled for purposes of website accessibility

Why Monster Beverage Shares Jumped 6% Higher Today

By Anders Bylund - Updated Apr 15, 2019 at 3:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The energy drink veteran's shares have been punished for all the wrong reasons in recent months, according to a SunTrust analyst.

What happened

Shares of Monster Beverage (MNST 2.60%) traded 6% higher at 9:50 a.m. on Tuesday. The energy drink giant enjoyed an upgrade and bullish analysis from an analyst firm today.

So what

William Chappell at the SunTrust Robinson Humphrey firm upgraded Monster from "hold" to "buy" today, raising his price target from $50 to $65 per share. The analyst cited lower ingredient prices and a successful repricing project in the U.S. market. Recent worries about limited growth in China and friction in the distribution partnership with Coca-Cola (KO 1.88%) are "overblown" in Chappell's eyes.

The finish line of a motocross race, featuring oversized Monster cans and many copies of the green-on-black clawmark logo.

Image source: Monster Energy.

Now what

As of Monday's market close, Monster's shares had traded 22% lower in 52 weeks and 15% lower in the last six months. The SunTrust analyst sees an attractive value in Monster at these prices, especially since the reasons for the stock's recent downtrend seem flimsy at best.

The stock does still trade at a relatively generous 28 times trailing earnings and 28 times free cash flows but can back it up with solid earnings growth and huge potential for international growth over the next few years. So I find myself nodding along with Mr. Chappell's bullish analysis here.

Check out the latest Monster Beverage earnings call transcript.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Monster Beverage Corporation Stock Quote
Monster Beverage Corporation
$94.58 (2.60%) $2.40
The Coca-Cola Company Stock Quote
The Coca-Cola Company
$63.04 (1.88%) $1.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.