By Senad Karaahmetovic
Morgan Stanley analyst Dara Mohsenian reiterated an Overweight rating and hiked the price target on Monster (NASDAQ:MNST) to $117.00 per share from $111.00 after topline/margin analyses.
Moreover, Monster is now a Top Pick at Morgan Stanley as the analysts yielded an “increased conviction in our even higher above-consensus FY23/24 topline/EPS forecasts, a large FY23 EPS growth inflection, and greater LT growth than the market implies in valuation.”
The analyst sees MNST stock moving higher on the back of the “strong and above consensus EPS growth inflection to 23% in FY23 from flattish FY21/22 trends.”
“The market DCF-implied LT topline growth forecast of 8-9% is well below our 12% LT forecast, which seems far too low given MNST has not posted any single quarter below 10% 2-yr avg organic sales growth since 2015 (exa COVID-impacted Q2 of 2020) and has averaged 19% 2-yr average organic sales growth in the last two quarters (or 16% in the last five quarters),” Mohsenian told clients in a note.
MNST replaces Constellation Brands (NYSE:STZ) on Morgan Stanley’s Top Pick list.
Monster shares are up almost 2% today.