Monster Beverage stock on track for a record high today. Here's what analysts like.

By Bill Peters

'Energy Drinks and (ready-to-drink) Coffee are the only two categories posting positive volume growth,' analyst says

Shares of energy-drink maker Monster Beverage Inc. were on pace to close at a record high on Monday, as new drinks help juice demand ahead of the company's quarterly earnings this week.

The stock was up 1.4% to 56.79 on Monday. Monster Beverage (MNST) shares have been up for eight straight days and are up around 8% over that time. The gains mark the stock's longest winning streak since January 2020, when shares rose for 10 consecutive trading days.

Monster Beverages reports first-quarter results on Thursday. In a research note last month, TD Cowen analyst Vivien Azer said energy drinks had continued to outperform other so-called ready-to-drink beverages -- drinks whose ingredients have already been prepared and bottled or canned.

"Indeed, Energy Drinks and (ready-to-drink) Coffee are the only two categories posting positive volume growth," she said in a research note last month. Volume is a measure of liquid sold.

Stifel analysts said in a note dated Sunday that Monster's U.S. sales growth for the first quarter likely neared 11.9%, despite more difficult comparisons. They said newer drinks likely helped sales.

"2023 innovation, in order of likely contribution to sales growth are Ultra Strawberry Dreams, Monster Zero Sugar, Reign Storm, and Reserve Kiwi Strawberry," analysts there said in a research note dated Sunday.

"Interestingly, sales growth for Monster Green has decelerated YTD as Monster Zero Sugar sales have increased," they continued. "We think this suggests modest cannibalization but also less shelf space allocated to Monster Green that should improve with anticipated increases in company/category shelf space in 1H23."

Those analysts also said that aluminum prices, Monster's biggest input cost, were falling.

Shares of Monster Beverage are up 33.9% over the past 12 months. By comparison, the S&P 500 Index is up 0.5% over that period.

-Bill Peters

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05-01-23 1408ET

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