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On Monday, Jefferies maintained a Buy rating on Celsius Holdings (NASDAQ:CELH) while increasing the price target from $40.00 to $44.00. The firm’s analyst, Kaumil Gajrawala, provided insights into the company’s outlook, anticipating a challenging first quarter. According to InvestingPro data, the company currently commands a market capitalization of $31.42 billion and trades at a P/E ratio of 46.68, indicating a premium valuation in the beverage sector. Gajrawala pointed out that several factors could lead to underperformance in the near term, including subdued demand, retail destocking, and rising inflation expectations, which may result in missed first-quarter targets and potential guidance revisions. InvestingPro analysis shows that 9 analysts have recently revised their earnings expectations downward for the upcoming period, lending credence to these concerns. Get access to all analyst revisions and 12+ additional ProTips with an InvestingPro subscription.
The analyst also highlighted the impact of new tariffs, describing them as an additional hurdle for the company in the upcoming year. Despite the lowered expectations for the quarter, Jefferies’ new price target suggests a continued positive long-term view on Celsius Holdings. The company maintains a solid gross profit margin of 51.53% and has demonstrated revenue growth of 3.7% over the last twelve months, according to InvestingPro data. Gajrawala noted that while the bar for performance has been set lower, it is still premature to determine whether the current market slowdown is temporary or will be more extended.
Jefferies’ analysis further considered the broader industry, with Gajrawala expressing a preference for the Soft Drinks and Consumer Health sectors, citing their stable trends. In contrast, he sees more risk in the full-year numbers for the Home and Personal Care (HPC) and Beverage Alcohol (Bev Alc) sectors, where the slowdown could be more pronounced.
Celsius Holdings, known for its fitness drinks, has been navigating a complex market landscape where consumer spending habits and economic pressures are influencing demand. The company’s ability to adapt to these challenges while capitalizing on its product offerings in the favored sectors may be crucial for its performance throughout the year.
The revised price target by Jefferies reflects an analysis of these various factors and represents an expectation that Celsius Holdings can weather the current challenges and continue to grow. As the company approaches the release of its first-quarter results, investors will be watching closely to see how well Celsius Holdings aligns with Jefferies’ projections.
In other recent news, Constellation Brands (NYSE:STZ) has faced several adjustments to its stock price targets from various analyst firms. Needham reduced its price target to $215, citing a cautious outlook for the company’s beer segment and a projected 3.8% increase in beer revenue for fiscal year 2026. Evercore ISI also lowered its target to $225, highlighting a decline in channel volumes and potential tariff uncertainties. Meanwhile, TD Cowen adjusted its target to $200, pointing to weaker consumer confidence among the Hispanic demographic and anticipated tariffs on Mexico and Canada that could reduce earnings per share by 20% for fiscal year 2026.
RBC Capital Markets slightly reduced its target to $289, maintaining an optimistic outlook despite the challenges Constellation Brands faces. Analyst Nik Modi noted the company’s consistent top-line growth and industry-leading margins but acknowledged the stock’s stagnant performance. Bernstein lowered its target to $230 due to new 25% tariffs on Mexican imports, which are expected to significantly impact Constellation Brands’ net sales and reduce earnings per share by about 25%.
Despite these developments, several analysts, including those from Evercore ISI and Bernstein, continue to maintain an Outperform rating, indicating a positive view of the company’s potential. The upcoming earnings report and guidance from Constellation Brands will be closely watched by investors as the company navigates these economic and political challenges.
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