U.S. Beverages: $20B SNAP Benefits could be gone by 2028; Beverages investors should not be worried

Research evidence excerpt

U.S. Beverages: $20B SNAP Benefits could be gone by 2028; Beverages investors should not be worried

erstood and priced in. The stock continues to react constructively to fundamental business results, as we

saw in Q1 of 2026. As such, we believe Beverages will continue to outperform and continue to drive appreciation.

We forecast 18% and 9% YoY EPS growth NTM and NTM+1, respectively, leaving us in line vs. consensus on NTM+1 EPS. We

apply a target multiple of 15x (unchanged) to arrive at our target price.

Monster Beverage Corp

We rate Monster Market-Perform, with a PT of $95. Monster has the best International business in Energy Drinks, powered

and protected by Coca-Cola’s distribution network. We believe that US category drivers are Global, and that Energy will

continue to grow rapidly in International markets. Coca-Cola’s unrivaled distribution network will position Monster uniquely well

to continue to gain share in these markets. A solid Brand portfolio to sustain share in the growing US market will also help.

We forecast 12% and 14% YoY EPS growth NTM and NTM+1, respectively, making us bullish vs. consensus on NTM+1 EPS by

~3%, driven by higher expectations on sales growth and margin. We apply a 35.4x target multiple to derive our target price.

PepsiCo Inc

We rate PepsiCo Market-Perform, with a PT of $134. Due to their Snacks business, PEP has the most challenged Category

Health in our coverage, and the company is losing share. While Beverages is a more attractive category, share losses across

subcategories have also challenged organic momentum here. These weaknesses in their NA business are offset by a healthy

and productive International business, which we believe is well understood.

We forecast 2% and 2% YoY EPS growth NTM and NTM+1, respectively.