By Carly Forster
Monster Beverage Corp (NASDAQ:MNST) is a Corona, California based leading marketer and distributor of energy drinks and alternative beverages. On August 14th, the company announced the start of a long-term partnership with The Coca-Cola Company (KO) in which Coca-Cola will acquire a 16.7% stake in Monster for $2.15 billion. As a result, Monster’s stock increased more than 30% on August 15th. The deal is expected to be completed towards the end of 2014 or the beginning of 2015.
A big part of the deal struck up between Monster Beverage and The Coca-Cola Company (NYSE:KO) is the agreement of an asset swap in which Coca-Cola will now own Monster’s non-energy beverages, including Hansen’s Natural Soda, Blue Sky Natural Soda, Peace Tea, and Hubert’s lemonade. In turn, Monster will now have ownership of Coca-Cola’s energy drink brands including NOS, Full Throttle, Burn, and Mother. Monster Beverage CEO Rodney C. Sacks said of the acquisition in a statement, the deal gives “[us] enhanced access to the Coca-Cola Company’s distribution system, the most powerful and extensive system in the world. At the same time, we become The Coca-Cola Company’s exclusive energy play”.
Shares of Monster Beverage Corp (NASDAQ:MNST) opened at $91.99 on Monday, August 18th. The beverage company has a 1-year high of $94.93 and a 1-year low of $51.15. The stock’s daily moving average is $90.22 and has a 50-day moving average of $68.60. The market cap for Monster is $14.79 billion and its P/E ratio is 41.54.
On August 18th, Citigroup analyst Wendy Nicholson maintained a HOLD rating for Monster with a $93 price target. She has a +8.3% average return on stocks she has rated and a 78% success rate in making recommendations.
On the other hand, on August 18th Seeking Alpha blogger Austin Poole advised Monster stock owners to “cash in [their] chips” as he believes the valuation is getting too high to sustain. Poole has a +2.5% average return on stocks he has rated and a 50% success rate in making recommendations.
On average, the top analysts’ consensus for Monster Beverage Corp is HOLD.
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Carly Forster writes about stock market news. She can be reached at [email protected]