Analysis - Monster Beverage Corp poised for global surge
Monster is tracking down Red Bull outside of the US
Monster Beverage Corporation's international profits will jump 50-fold over the next three years, an analyst has predicted.
In a note to clients, Stifel analyst Mark Astrachan said today (11 April) that Monster's annual operating profits from sales outside of the US will increase from US$5m last year to $101m in 2015. At the same time, international operating margins will rise from 1.1% to 13.4%.
Astrachan also said the energy drinks maker is poised to cut into Red Bull's global hegemony, as it has done in the US and Western Europe. “Monster’s share has steadily increased in many international markets, an indication of solid consumer acceptance,” Astrachan said.
According to Stifel estimates, Monster will grow its international market share in value terms from 5.1% to at least 7.5% by 2015. Astrachan added: “We believe our rest-of-the-world growth and market share assumptions could prove conservative, given Monster’s substantial share gains over a relatively short time in the US and Western Europe.”
Monster is likely to repeat the formula of strong sponsorship and promotional efforts that saw it overtake Red Bull as the market leader by volume in the US in ten years, Astrachan said.
This week, Monster announced a US$200m buyback of the company's outstanding common stock.
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