5 Takeaways from Monster Beverage (MNST) Analyst Day - Stifel

Stifel analyst, Mark Astrachan, published 5 key takeaways from Monster Beverage's (NASDAQ: MNST) analyst day Tuesday. The firm made no change to Buy rating or $170 PT.

US market improving: U.S. energy drink category sales growth remains solid, up high-single-to-low double-digits, with Monster share accelerating from modest underperformance in part reflecting price increases from Red Bull, share gains from Rockstar, and disruptions from the transition to Coke distribution in mid-year 2015.

China on track for a 1H16 rollout: Monster has likely determined package size, price point, and production (355ml cans at RMB 6.00-7.00), and is narrowing launch timing by city/province and finalizing formulation. China's market is approximately $3bn-$4bn and growing double-digits.

Cash distribution imminent: Management anticipates a decision on cash use by its late February earnings call ($2.8bn in cash and equivalents at 3Q15), stating it would be returned to shareholders via share repurchase or a tender.

New products: Management said it plans to launch significant innovation into at least four new categories through 2017, with two or three launching in 2016. The analyst thinks innovation will include a Monster branded enhanced water offering using the “E20” moniker and could also include coffee and juice offerings.

More Coke distribution. The company is in advanced discussions with Coke bottlers in Latin America and Australia for distribution of the Monster brand, which we anticipate will benefit current sales trends in each region.

For an analyst ratings summary and ratings history on Monster Beverage click here. For more ratings news on Monster Beverage click here.

Shares of Monster Beverage closed at $147.30 yesterday.

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