Update (9:40 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- UBS decreased its price target on Monster Beverage (MNST) to $75 and set a "buy" rating. The firm based its decision on controlled expenses, and it expects revenue trends to pick back up as destocking pressure abates.
The stock was down 3.9% to $63.54 at 9:40 a.m. on Friday.
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Separately, TheStreet Ratings team rates MONSTER BEVERAGE CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MONSTER BEVERAGE CORP (MNST) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, growth in earnings per share, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MNST has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.88, which clearly demonstrates the ability to cover short-term cash needs.
- MONSTER BEVERAGE CORP has improved earnings per share by 12.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MONSTER BEVERAGE CORP increased its bottom line by earning $1.96 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.46 versus $1.96).
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The gross profit margin for MONSTER BEVERAGE CORP is rather high; currently it is at 52.41%. Regardless of MNST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.07% trails the industry average.
- You can view the full analysis from the report here: MNST Ratings Report