US: Analysts raise view on Hansen Natural
Monster Energy producer Hansen Natural tipped for bright future
Evidence of strong early demand for the Monster Rehab drink has helped to persuade Stifel Nicolaus analysts to up their full-year profits guidance on Hansen Natural for 2011 and 2012.
Stifel analysts expect Hansen to achieve earnings per share of US$3.09 in 2011 and $3.71 in 2012, up 2.6% and almost 4% respectively on their previous estimates. In a note late last week, they said that Hansen is believed to have continued performing strongly in the third quarter of 2011.
The group's new 'recovery' drink, a half-lemonade, half-tea beverage named Monster Rehab, has performed particularly well since launching in March. "Our checks indicate Rehab has achieved significant and almost entirely incremental shelfspace and is already amongst the company’s top five selling SKUs," said the Stifel team.
"We estimate Rehab added 7% to overall sales growth in Q2 2011 and anticipate a similar contribution in H2, particularly given three line extensions anticipated to hit shelves at the end of October." In addition, the analysts said, Hansen has continued to grow international sales and also gain market share in its native US market.
Stifel analysts predicted that Hansen will achieve double-digit rises in annual net sales for the next three to five years. "We estimate Monster Energy’s market share, by value, of Europe’s energy drink category was 3.4% in 2010 and that it will more than double to 7.7% in 2012," they said. "We believe Hansen could achieve a 20% share by 2015."
In August, Hansen Natural reported a 44.5% rise in half-year net profits, to $139.3m. Net sales rose by 35.6% to $818.6m.
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