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Investing.com - Needham raised its price target on Celsius Holdings (NASDAQ:CELH) to $70.00 from $60.00 on Friday, while maintaining a Buy rating on the energy drink maker’s stock. The company, currently valued at $15.7 billion, has demonstrated remarkable growth with a 78% revenue CAGR over the past five years. According to InvestingPro analysis, Celsius maintains a "GREAT" financial health score, with 18 key investment insights available to subscribers.
The price target increase reflects Needham’s adjusted model accounting for Alani’s transition into the PepsiCo distribution system, along with the incrementality of Rockstar.
Needham views the expanded partnership with PepsiCo as strategically sound, noting that most investors they spoke with wanted to see Alani transition into the PepsiCo distribution system.
The firm believes that while Anheuser-Busch has performed well with Alani, PepsiCo is better positioned as a distributor and should drive higher total distribution points through different channels, particularly convenience stores and foodservice.
Needham also highlighted that this move alleviates concerns about Celsius’s relationship with PepsiCo after initially opting for a dual distribution network following the Alani acquisition, reiterating Celsius as a conviction list pick.
In other recent news, Celsius Holdings has announced several significant developments. The company is set to acquire the Rockstar Energy brand from PepsiCo, which is expected to add approximately $250 million in annual revenue by the third quarter of 2026. This strategic move is part of an expanded partnership with PepsiCo, which will also see Celsius become PepsiCo’s "energy drink captain" and facilitate the distribution of Alani Nu through PepsiCo’s network starting December 2025.
In conjunction with these developments, PepsiCo plans to increase its stake in Celsius Holdings to 11% through a $585 million investment in convertible preferred stock. Analyst firms have responded positively to these announcements, with Jefferies, TD Cowen, and B.Riley all raising their price targets for Celsius to $72 and $75, respectively, while maintaining a Buy rating. Additionally, Michael Del Pozzo, a PepsiCo executive, has been appointed to the Celsius Holdings Board of Directors. These recent developments highlight the strengthening ties between Celsius and PepsiCo, potentially boosting Celsius’ market presence and growth trajectory.
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