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Investing.com - Jefferies raised its price target on Monster Beverage (NASDAQ:MNST) to $74.00 from $72.00 on Wednesday, while maintaining a Buy rating on the energy drink maker’s stock. According to InvestingPro data, competitor Celsius Holdings (NASDAQ:CELH) has shown remarkable momentum with a 73% year-to-date return and projects 61% revenue growth for FY2025.
The firm cited accelerating growth in the energy drink category, which is currently expanding at a rate of 15%. Jefferies noted this growth stems from improved execution, new market entrants providing incremental growth, successful innovation, and increasing perceived value among consumers. InvestingPro analysis reveals Celsius maintains strong financial health with a current ratio of 3.38 and zero debt concerns, positioning it well to capture market share. Discover 15+ additional exclusive ProTips and comprehensive analysis in the Pro Research Report.
Jefferies pointed out that the energy drink sector is thriving because companies are "playing to win," with Red Bull leading the category. For public equity investors, the firm views this category strength as beneficial for Monster Beverage, Celsius, and Keurig Dr Pepper (NASDAQ:KDP) (which owns C4, GHOST, and Bloom energy drink brands).
The research firm also highlighted that easier year-over-year comparisons for the sector only began in June, suggesting potential for continued strong performance in coming months.
Jefferies reiterated its Buy ratings on both Monster Beverage and Celsius as part of its updated outlook on the energy drink market.
In other recent news, Celsius Holdings has been in the spotlight with several significant developments. The company reported strong sales growth, with a combined 40% year-over-year increase for its Celsius and Alani Nu brands, according to Morgan Stanley (NYSE:MS). Stifel resumed coverage of Celsius Holdings, assigning a buy rating and a $47.00 price target, citing expected improvements in sales growth driven by distribution expansion and marketing initiatives. Jefferies also raised its price target for Celsius to $54.00, maintaining a buy rating, and highlighted the company’s distribution gains as a key factor for growth. TD Cowen reiterated its buy rating and $55.00 price target, expressing confidence in Celsius’s growth trajectory and noting potential distribution opportunities for the Alani Nu brand.
Furthermore, Truist Securities increased its price target to $50, maintaining a buy rating, and pointed out the strategic acquisition of Alani Nu for $1 billion as a major step in enhancing market presence. This acquisition is expected to provide greater scale and a broader product portfolio in the functional beverage category. The addition of a new Chief Operating Officer is anticipated to bolster the ongoing distribution deal with Pepsi, as noted by Truist Securities. These developments suggest that Celsius Holdings is positioning itself for future growth with strategic acquisitions and improved distribution channels.
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