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On Monday, Jefferies analyst Kaumil Gajrawala increased the price target for Celsius Holdings (NASDAQ:CELH) to $40.00, up from the previous target of $33.00. The Buy rating on the stock has been retained. Gajrawala’s optimism stems from a stronger-than-anticipated fourth quarter, highlighting both top and bottom-line outperformance. The stock has shown remarkable momentum, with a 46% return over the past week. According to InvestingPro analysis, the company appears undervalued despite trading at a P/E ratio of 44.4x. The recent acquisition of Alani Nu was also noted as a positive development for the company.
Celsius Holdings, which is carving out its place as the third-largest energy drink player with approximately a 15% market share, is expected to see significant growth from the Alani Nu acquisition. With current revenues of $1.36 billion and a projected 18% growth for FY2025, the company shows strong momentum. Gajrawala projects that this move could contribute an increase of 41% to Celsius’ sales and 30% to its adjusted EBITDA in 2025. InvestingPro data reveals the company maintains robust financial health with a current ratio of 3.62x and minimal debt. The analyst emphasized the importance of Celsius continuing to focus on reviving its core product growth and achieving a pivotal market share increase.
The accretive nature of the Alani Nu deal is seen as a potentially key factor in helping Celsius Holdings achieve these goals. Furthermore, Gajrawala noted that the company’s year-over-year comparisons are set to become more favorable starting in the second quarter. This change is anticipated to further support the company’s financial performance.
The reaffirmed Buy rating by Jefferies indicates confidence in Celsius Holdings’ strategic initiatives and their potential to enhance the company’s financial metrics. This sentiment is backed by the recent positive developments and the expected impact of the Alani Nu acquisition on the company’s future growth prospects.
In other recent news, Celsius Holdings reported its fourth-quarter 2024 financial results, showcasing a notable performance by surpassing earnings expectations. The company achieved an earnings per share (EPS) of $0.14, exceeding the forecasted $0.10, and posted revenues of $332.2 million, which was higher than the anticipated $327 million. Despite a 4% decline in net sales year-over-year for the quarter, the company saw a 3% increase in full-year revenue to $1.36 billion. Celsius Holdings also announced a strategic move to acquire Alani Nu for $1.8 billion, aiming to enhance its market share and leverage cost synergies of $50 million over two years. CFRA analyst Garrett Nelson raised the price target for Celsius Holdings to $45, maintaining a Buy rating, even as the 2025 EPS estimate was adjusted downwards. The acquisition of Alani Nu is expected to complement Celsius’s portfolio and expand its reach in the energy drink market. The company has also significantly expanded its distribution network, partnering with major retailers to boost its presence. These developments reflect Celsius Holdings’ strategic efforts to strengthen its position in the competitive energy drink sector.
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