Business
Monster Beverage (MNST) to Benefit From Energy Drinks Business
Monster Beverage (MNST) to Benefit From Energy Drinks Business
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Monster Beverage Corp. MNST has been experiencing continued strength in its energy drinks category, which is driving its performance. The company has been benefiting from the expansion of the energy drinks category and product launches. Product innovation has played a significant role in the company's success.Pricing increases, along with lower freight-in costs and reduced aluminum can costs, have been contributing to robust margins. The company’s steady lineup of product launches is likely to help retain its business momentum.The Zacks Rank #3 (Hold) company has a market capitalization of $57.6 billion. In the past year, shares of the company have gained 7.5% compared with the industry’s 9.3% growth. The stock compared favorably with the sector’s decline of 3.5% in the same period.The Zacks Consensus Estimate for MNST’s 2024 sales and earnings indicates growth of 11.1% and 15.9%, respectively, from the year-ago registered numbers.Factors Driving GrowthMonster Beverage remains committed to product launches and innovation to boost growth. During the third quarter, MNST rolled out its first flavored malt beverage alcohol product, The Beast Unleashed, in the United States and received positive feedback. The product is now available in 43 states through a network of beer distributors. This marked the expansion of the distribution of The Beast Unleashed into additional markets, with plans for nationwide distribution by the end of the year.The company intends to launch a hard iced tea extension of The Beast Unleashed, named Nasty Beast Hardcore Tea, later this year or early next year, with a target of nationwide distribution in the first half of 2024. The brand will be available in four flavors, Original, Half & Half, Razzleberry, and Green. These will be sold in 24-ounce single-serve cans, as well as in a variety of 12-pack of 12-ounce sleek cans.Monster Beverage has been witnessing robust margin trends driven by the easing of the supply-chain headwinds, particularly reduced freight costs. Additionally, the company continues to benefit from its pricing actions across various regions to negate the impacts of rising commodity costs and inflation. MNST continued to implement price hikes in the third quarter of 2023, with additional price hikes planned in several other markets through the remainder of the year.In third-quarter 2023, Monster Beverage’s gross margin...