Monster Beverage Analyst Steps To The Sidelines As Bang Energy Sales Decline

Shares of Monster Beverage Corp MNST continued to recover in early trading on Tuesday, after declining through most of October.

Bang Energy had looked like an attractive acquisition, but its sales continue to decline, impacting Monster Beverage’s outlook, according to a Piper Sandler analyst.

The Monster Beverage Analyst: Michael Lavery downgraded the rating for Monster Beverage from Overweight to Neutral, while reducing the price target from $63 to $50.

The Monster Beverage Thesis: Bang's U.S. measured retail sales declined by 72.6% in the most recent four weeks, worsening from a decline of 71.5% in the previous four-week period, Lavery said.

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“MNST's US measured retail sales (ex-Bang) grew +5.8% in the latest four weeks ended 10/8 vs. +8.9% in the four weeks prior,” the analyst wrote. “Current slower momentum in US scanner data, coupled with longer-term risks from teens adopting the brand at a slower rate than has been true in the past make us more cautious, though we do continue to recognize the strength of its balance sheet."

MNST Price Action: Shares of Monster Beverage had risen by 0.11% to $50.36 at the time of publication Tuesday.