NEW YORK—Shares of Hansen Natural Corp. rose in premarket trading Friday after the maker of Monster Energy drinks beat second-quarter earnings expectations on strong sales and international expansion.
UBS analyst Kaumil Gajrawala raised his 12-month price target on shares of the Corona, Calif.-based company to $52 from $50 and his estimates for the next two fiscal years.
The company said late Thursday its net income rose 11 percent while revenue jumped 22 percent.
Gajrawala said the U.S. business will keep growing and it will benefit because it has among the most exposure to convenience stores. Shoppers cut their spending at those stores -- which are more expensive than grocery stores -- as the economy was weak, but analysts expect that is improving as the economy gets better.
He said there are not many investment opportunities to invest a strong brand like Monster and one where a company is so focused on its core.
"We believe Monster has the legs to become a strong global brand," he said.
He said the company faced among the steepest challenges in the beverage category because its product sells at a premium and is heavily concentrated in California, where the economy has been especially weak.
"Going forward, Hansen should benefit from 40 percent to 50 percent revenue growth internationally, continued strength in the U.S. and new product launches," he said.
He raised his 2010 earnings per share estimate to $2.42 from $2.41, and to $2.80 from $2.71 in fiscal 2011.
Analysts expect the company to earn $2.32 in 2010 and $2.59 in 2011, according to Thomson Reuters.
Hansen shares rose $1.41, or 3.6 percent, to $42.99 in Friday premarket trading.