Energy Drink Giant Rises on Pre-Earnings Praise

The company will report third-quarter earnings on November 5

Deputy Editor
Nov 3, 2020 at 3:13 PM
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The shares of Monster Beverage Corporation (NASDAQ:MNST) are up 1.3% at $78.93 at last check, after Morgan Stanley upgraded the stock to "overweight" from "equal weight," with an added price-target hike to $90 from $87. Along with confidence on MNST's outlook long-term, the analyst in coverage believes that beverage sales appear to be rebounding from their coronavirus lows, and that the company will have better-than-expected quarterly results to provide tailwinds. 

Monster Beverage is set to report earnings after the close on Nov. 5, and a look back at its past eight reports shows a mostly positive post-earnings response, with 75% of these next-day sessions ending higher. The security has averaged a post-earnings swing of 5.1%, regardless of direction, which is lower than the 9.8% the options market is pricing out for this time around. 

In a rare event, the options pits are buzzing after today's pre-earnings upgrade, with 3,580 calls across the tape so far -- seven times what's typically seen at this point. Most of this activity belongs to the weekly 11/13 86.50-strike call, where new positions are being opened. 

On the charts, MNST has fallen lower since its early-August bull gap. Today recovering its 100-day moving average, which it fell below for the first time since May. The equity is up 24% year-to-date.



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