Monster Beverage: Favorable Demand Trends and Coke Partnership to Fuel Growth; Shares Expensive

We are raising our fair value estimate for Monster Beverage MNST to $48 (from $43), which implies a 2024 enterprise value to adjusted EBITDA multiple of 22 times. The increase is driven by higher interest income estimates over the next 10 years (2% return on cash, versus 0.1% in the prior model) alongside faster growth (7%, versus 4% previously) in earnings before interest (excluding tax) in the five years following the 10-year explicit forecast period, as we anticipate more robust volume expansion.