2 Reasons Deutsche Bank Is Buying the Monster Beverage Stock Dip

The beverage stock got crushed last week

Mar 5, 2018 at 9:54 AM
facebook twitter linkedin


Monster Beverage Corporation (NASDAQ:MNST) stock suffered a major pullback last week due to the company's poorly received fourth-quarter earnings results. The shares fell from $63.37 at the close on Wednesday to $54.16 by week's end, breaching the 200-day moving average for the first time in almost a year in the process. Deutsche Bank sees the weakness in MNST stock as a buying opportunity, however.

The brokerage firm this morning upgraded the equity to "buy" from "hold," though it maintained its price target of $63. Deutsche analysts cited Monster's potential for innovation this year in the note, and said it believes the inventory issues that plagued the company in the fourth quarter will be resolved.

Most analysts are actually already bullish on MNST shares, with 8 of 12 saying they were a "buy" coming into today. The average 12-month price target, meanwhile, stands at $68.61.

We'll see if options traders remain bullish. Peak open interest currently resides at the June 60 call, and data confirms positions here were mostly bought to open. This means a large number of traders expect Monster Beverage stock to trade back atop $60 in the coming months.

So far today the security is trading up 2.5% at $55.52. While it has a lot of ground to cover if it wants to revisit its 52-week high of $70.22, it still sports a one-year advance of 13%. Plus, MNST could find support near the half-century level, which previously served as a level of resistance through 2015 and 2016.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners