Strong Sales, Greater Than Expected Margin Pressure Leave Our Long-Term Outlook Intact for Monster

Our $80 per share valuation of narrow-moat Monster Beverage should not change significantly after it reported mixed fourth-quarter results, with the impact of a slightly lower near-term margin outlook offset by the revocation of our prior expectation of a U.S. corporate tax increase. As we attribute the margin pressure to pandemic-related inflation, we do not anticipate changing our long-term outlook materially (mid- to high-single-digit percentage annual sales growth, mid-30s operating margins).