Monster Beverage Posts Solid Sales but Lackluster Profitability Amid Cost Pressure; Shares Rich

Our $79 per share valuation of narrow-moat Monster should rise by a low- to mid-single-digit percentage after its third-quarter earnings announcement, mostly on account of the time value of money as strong sales were offset by supply chain and aluminum can cost pressure. We view the challenges as transitory, and so our long-term forecasts (mid- to high-single-digit percentage top line growth against mid-30s adjusted operating margins) remain in place. We suggest investors await a more attractive entry point before building a position.