Coca-Cola, Monster Tie-Up ‘More An Eventuality Than If,’ Says Guggenheim
2022.04.01 21:27
By Sam Boughedda
Investing.com –Coca-Cola Co (NYSE:KO) should buy Monster Beverage Corp (NASDAQ:MNST), according to Guggenheim analyst Laurent Grandet.
Such a deal “now makes the most sense,” the analyst wrote, raising Coke’s price target just $1 to $68 while keeping a buy rating.
Coke shares rose more than 3% on Friday, while Monster shares rose more than 2%.
Grandet argued that Moster’s Chairman, and CEO, Rodney Sacks, and his business partner, CFO Hilton Schlosberg, should pass the baton to a new owner who can lead the business and the brand they created to another level.
“We think the time is now as we believe the value of the company will likely have limited upside just on fundamentals due to a more challenged U.S. market and multiple sources of margin pressure,” explained the analyst.
“We believe the best outcome for the company and the brand would be to be acquired by K.O., which already owns ~19% of it,” he added.
Grandet’s bull thesis on both Coca-Cola and Monster is based on the view that Coca-Cola acquiring the energy drink company is “more of an eventuality than an if.”
