Reiterate OW: Why Q2’s Negative Stock Reaction Was Too Pessimistic and Offers a Good Entry Point

Research evidence excerpt

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M

Idea

August 11, 2026 10:00 AM GMT

Monster Beverage Corp | North America

Morgan Stanley & Co. LLC

Dara Mohsenian, CFA

Equity Analyst

Reiterate OW: Why Q2's

Negative Stock Reaction Was

Too Pessimistic and Offers a

Good Entry Point

Eric A Serotta, CFA

Equity Analyst

Patty Kanada, CFA

Equity Analyst

Kenneth Tan

Research Associate

Josh Haubenstock

Research Associate

Unfair stock pullback on Q2 offers a good entry point: 1) revenue

trends (2Y avg OSG) accelerated significantly; 2) a large

unexpected Q2 GM inflection matters more to LT EPS than

temporary opportunistic SG&A reinvestment this summer; and

3) int'l OSG/GP/OP growth of 29%/42%/51% was very

impressive.

Monster Beverage Corp (MNST.O, MNST US)

Beverages | United States of America

Stock Rating

Industry View

Price target

Shr price, close (Aug 10, 2026)

Mkt cap, curr (mm)

52-Week Range

Monster's stock was off ~6% last week (vs a +3.5% S&P move) mainly on Q2 EPS,

Fiscal Year Ending

where we believe forward positive EPS revisions were less than expected given

EPS ($)**

Prior EPS ($)**

P/E

EPS ($)§

Div yld (%)

much higher-than-expected SG&A, sending Monster's stock down -4% on the day (vs

a +0.6% S&P increase) against a high bar. In contrast, we view Q2 as a clear positive,

even relative to a high bar, for the reasons below:

Key Point #1: Why We View Monster's Q2 as a Positive and Disagree with the

Pullback: We view Monster's Q2 results as offering further confirmation of both

Overweight

Attractive

$110.00

$91.43

$90,360

$100.34-60.97

12/25 12/26e 12/27e 12/28e

2.00

19.1

2.00

0.0

2.34

39.1

2.31

0.0

2.72

33.6

2.63

0.0

3.14

29.1

2.95

0.0

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

e = Morgan Stanley Research estimates

strong LT growth potential and significant upside vs consensus. On revenue, while

the bar was high, 1) the magnitude of the Q2 beat at 4% was better than the 2-3%

expected by the market, in our view, but also 2) the composition was favorable, as

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