CFRA cuts Celsius Holdings stock rating to sell, target to $30

Published 25/04/2025, 16:28
CFRA cuts Celsius Holdings stock rating to sell, target to $30

On Friday, CFRA analyst Garrett Nelson issued a downgrade for Celsius Holdings (NASDAQ:CELH), shifting the rating from Buy to Sell and reducing the price target to $30 from the previous $45. Nelson cited an unfavorable risk/reward profile following the stock’s significant year-to-date (YTD) gain of 41%, leading to the decision to lower the rating. According to InvestingPro data, the stock currently appears undervalued despite its recent gains, with a beta of 1.57 indicating higher than market volatility.

Nelson maintained his adjusted earnings per share (EPS) estimates for Celsius at $0.90 for 2025 and $1.20 for 2026. The new price target is based on a projected price-to-earnings (P/E) ratio of 25 times for the year 2026, which represents a discount compared to the company’s historical average multiples. InvestingPro analysis reveals the company currently trades at a P/E ratio of 79.6x, with multiple valuation metrics suggesting premium pricing. Subscribers can access 16 additional ProTips and comprehensive valuation metrics through the Pro Research Report.

The CFRA analyst noted that the reduction in short interest for Celsius Holdings’ stock, from nearly 17% of shares outstanding in early March to 10.5% currently, could make the shares less susceptible to a short squeeze in the event of favorable news. This decrease in short interest was highlighted as a factor in the analyst’s reassessment.

Despite acknowledging Celsius Holdings’ strong financials, including robust gross margins of approximately 50% in 2024 and a solid balance sheet with $870 million of net cash expected at the end of 2024, Nelson expressed concerns about the company’s organic revenue growth. He compared Celsius unfavorably to more defensive, lower-risk soft drink companies with greater international exposure and attractive dividends, such as The Coca-Cola Company (NYSE:KO) and PepsiCo (NASDAQ:PEP), which could benefit from a weak U.S. dollar.

In other recent news, Celsius Holdings has completed its acquisition of Alani Nutrition for $1.8 billion, netting $1.65 billion after accounting for tax assets. This acquisition is expected to enhance Celsius’s growth in the energy drink sector, particularly appealing to health-conscious consumers. Truist Securities upgraded Celsius Holdings to a Buy rating and increased its price target from $35 to $45, citing the long-term benefits of the Alani Nu acquisition as a strategic advantage in the women’s energy drink segment. Piper Sandler also raised its 2025 earnings per share estimate for Celsius Holdings from $0.91 to $1.00 and adjusted its price target to $44, maintaining an Overweight rating. The firm noted improved retail sales trends and manageable exposure to aluminum tariffs as contributing factors. Meanwhile, Constellation Brands (NYSE:STZ) received a price target increase from Jefferies to $201, though the firm maintained a Hold rating due to anticipated market pressures. Jefferies expressed concerns over potential headwinds in Constellation Brands’ first-quarter performance, including subdued demand and rising inflation expectations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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