Monster Beverage Strong Sales Momentum Offset by Margin Pressure, RBC Says

MT Newswires Live
Nov 07

Monster Beverage (MNST) reported strong Q3 sales growth, with October trends reinforcing its momentum despite continued gross margin pressure, RBC Capital Markets said Friday in a note.

International sales grew 28.1% to $1.20 billion in Q3, accounting for about 47% of total sales. Latin American sales were largely driven by Brazil, while APAC and EMEA also contributed meaningfully to topline performance, according to the note.

Q3 gross margin declined to 54.7%, primarily due to higher aluminum can costs, an unfavorable geographical sales mix and elevated freight-in costs. Management expects these cost headwinds to persist through at least Q1 2027, with stronger gross margins expected in the back half of 2027, the brokerage said.

RBC noted that the Nov. 1 pricing action, along with other measures, could help offset the pressure.

The brokerage now expects 2026 consolidated sales growth of 19.3%, up from 17.7%, while its EPS estimate remains unchanged at $1.14. For 2027, it expects net sales growth of 10.6%, up from 10.5%, and EPS of $1.29, down from $1.30.

RBC maintained its outperform rating and $50 price target on Monster Beverage.

The company's shares were down 3.6% in Friday afternoon trading.

Price: 46.13, Change: -1.71, Percent Change: -3.56

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