Stifel sees a favorable risk/reward for Monster Beverage (NASDAQ:MNST) into the company's 1Q23 results, analysts said in a note to clients on Monday.
The firm kept a Buy rating and $62 price target on the stock, with the analysts adding that they are maintaining their slightly above-consensus 4Q22 sales estimate.
"We estimate Monster's U.S. sell-in and sell-through ended 2022 in line with recent historical averages, resulting in 1Q23 sales growth nearing 11.9% in scanner data despite tough comparisons," the analysts wrote.
Stifel believes the stronger growth in sales compared to previous years is due to untracked channels, including e-commerce, Costco (NASDAQ:COST), and food service/vending.
"We think operating profit growth should meaningfully exceed sales, driven by gross margin expansion reflecting lessening input and freight/logistics costs and carryover pricing and SG&A expense leverage," they added.