Monster Beverage Corporation

Monster Beverage Corporation (NASDAQ: MNST) is a holding company. The Company, through its subsidiaries, develops, markets, sells and distributes energy drink beverages and concentrates on energy drink beverages under various brand names.

Recent Financial Update:

• In the first quarter of 2023, MNST achieved a record net sales figure of USD 1.70 billion, representing an 11.9 percent increase compared to the same period in 2022. However, adverse changes in foreign currency exchange rates had a negative impact of USD 52.0 million on net sales during the quarter. Adjusting for these currency effects, net sales still showed a significant growth rate of 15.3 percent.
• MNST also experienced an improvement in gross profit as a percentage of net sales, reaching 52.8 percent in the first quarter of 2023, compared to 51.8 percent in the fourth quarter of 2022 and 51.3 percent in the third quarter of 2022.
• Net income for the first quarter of 2023 rose by 35.1 percent to USD 397.4 million, with net income per diluted share increasing by 36.6 percent to USD 0.38.
• MNST did not repurchase any shares during the quarter, but approximately USD 682.8 million remains available for repurchases under previously authorized programs.
• The company retired 170.0 million shares of treasury stock, valued at approximately USD 4.69 billion, on March 10, 2023.
• Additionally, MNST announced a two-for-one stock split, with the stock dividend issued on March 27, 2023, and trading at the split-adjusted price commencing on March 28, 2023.

Technical Observation (on the daily chart)

The stock price has given an impressive return over the past year, with a return of 26.83%, indicating an uptrend trend. This uptrend trend is also evident in the medium-term, with a return of 12.82% in the previous six months. The price has broken above an important resistance of USD 50, after the announcement of FY22 financial results. The price has formed double top in May 2023, and has since corrected. The momentum indicator RSI (14 period) currently stands at 46.16, correcting from overbought level, suggest some short-term consolidation or correction. It is worth noting that the price is currently trading between both the 21-day and 50-day SMA trend-following indicators, and these SMAs will act as short-term resistance and supports respectively.  

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 08, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.