Monster Beverage likely considering hard seltzer, says Stifel

Stifel analyst Mark Astrachan believes Monster is considering introducing an alcoholic beverage, most likely a seltzer. The company could launch a non-alcoholic sparkling water under the Monster brand while the alcoholic version will be a new brand, like Reign, Astrachan tells investors in a research note. Monster is likely to launch a "value-added" hard seltzer that expands category usage occasions similar to how it has utilized innovation in energy drinks, adds the analyst. He thinks think Monster is likely to seek distribution via a large beer network, with a product rollout in 2021. Assuming similar share achievement to Reign, Astrachan estimates a new alcoholic beverage could add $76M in sales, or 2.6% of Monster's estimated 2020 U.S. sales. He keeps a Buy rating on the shares with a $77 price target. Monster Beverage closed Friday up 23c to $69.26.