NEW YORK (TheStreet) -- Shares of Monster Beverage (MNST) - Get Report are plunging by 4.05% to $155.05 in afternoon trading on Monday, as Wells Fargo lowered its rating on the stock to "market perform" from "outperform."
The downgrade stemmed from expectations of weak second quarter revenue growth, as well as the delayed release of Monster's Mutant and Hydro drinks in the fourth quarter, Bloomberg reports.
"While we have a very favorable outlook in the long term, over the near term we have concerns given soft results in Q2 and delays in launching new innovation," Wells Fargo added in an analyst note.
Monster's partnership with Coca-Cola (KO) last year has helped the company expand its reach in the U.S. and internationally. Still, Monster's growth may be stunted outside the U.S. by macroeconomic challenges, a few territorial disputes with Coca-Cola and a disappointing introduction in China, the firm noted.
Monster is a Corona, CA-based beverage producer that sells energy drinks, natural soft drinks and fruit drinks.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate MONSTER BEVERAGE CORP as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
You can view the full analysis from the report here: MNST