Citi upgrades Monster Energy, says underperformance is opportunity to get the growth stock for cheap
Investors should jump on Monster Energy before the beverage stock finds a second wind, according to Citigroup. Monster's stock has been sluggish in 2021, rising just 1% year to date. Citi analyst Wendy Nicholson said in a note to clients Thursday night that the underperformance has created an opportunity, and it upgraded the stock to buy from neutral. "Given that this relative valuation is well below MNST's average 85% premium to the market over the last decade, today's stock price feels attractive enough to us to warrant a Buy rating," the note said. Monster has averaged a 12-month return of 21% over the past decade The energy drink company also offers a strong growth outlook and a clean balance sheet, Citi said. "We like the long-term outlook for MNST and we continue to be optimistic that MNST will gain more market share in the growing global energy drink category. Further, with $2.2+ [billion] of cash and zero debt on its balance sheet, MNST has considerable flexibility to repurchase more shares," the note said. As part of the upgrade, Citi hiked its price target on Monster to $110 per share from $97. The new target is 17.8% above where the stock closed on Thursday. Monster has not announced the date for its next earnings report, but it typically releases its second-quarter results in August. -CNBC's Michael Bloom contributed to this report.

Cans of Monster Energy Drink are displayed on a shelf at a convenience store in Kentfield, Calif. Getty Images