Monster Beverage (MNST) is positioned for margin improvement in 2027 and beyond as it works through aluminum and geographic-mix pressure and benefits from several structural tailwinds, Morgan Stanley said Sunday in a report.

Q1 results showed solid regional gross margins, better-than-expected aluminum cost management, and stronger underlying corporate gross margins after adjusting for negative geographic mix, the report said.

The company also has several drivers of margin expansion, including increased pricing power, favorable product mix, and better cost leverage, Morgan Stanley said. Monster's potential divestiture of its alcohol business would also be accretive to margins and earnings, the report said.

Morgan Stanley raised its price target on Monster stock to $103 from $100 and reiterated its overweight rating.

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