By Davit Kirakosyan
Analyst Mark Astrachan from Stifel released a company update on Monster Beverage (NASDAQ:MNST). According to the brokerage, the third-largest U.S. energy drink brand Bang’s settlement payment could accelerate shelf space/share loss, which will benefit Monster, Red Bull, and Celsius.
In April, an arbitrator ordered that Bang owner Vital Pharmaceuticals pay $175 million in damages, $9 million in legal fees, and a 5% royalty on the majority of future Vital/Bang sales to Monster and Orange Bang. Given Bang’s estimated total free cash flow generation from 2017-2021 of $242 million, the brokerage believes Bang’s loss of shelf space resulting from reduced spending to help pay the settlement, could benefit the largest energy drink brands, including Monster, Red Bull, and Celsius.
The brokerage reiterated its Buy rating and $105 price target on the company’s shares.