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On Tuesday, Morgan Stanley (NYSE:MS) reiterated an Equalweight rating on Celsius Holdings (NASDAQ:CELH), with a consistent price target of $42.00. The stock, currently trading at $29.93, has shown significant volatility with a 13.6% gain year-to-date despite falling 66.6% over the past year. According to InvestingPro data, analyst targets range from $26 to $62, reflecting mixed sentiment in the market. The assessment followed an analysis of recent sales data, which showed a slight improvement for the Celsius brand in the last two weeks (L2W) ending March 8, 2025, within NielsenIQ xAOC+C channels. Sales decline slowed to -1.4% compared to -7.6% in the prior two weeks, and market share, excluding powders, rose by +10 basis points sequentially. Total (EPA:TTEF) distribution points (TDP) for Celsius experienced low double-digit growth, maintaining the same pace as before, while the decrease in sales velocity showed signs of moderation. The company maintains strong financial health with a current ratio of 3.62 and more cash than debt on its balance sheet, as revealed by InvestingPro analysis.
Morgan Stanley’s analyst noted the volatility of weekly data, which has been influenced by weather-related events such as storms leading to fluctuations in stock-up and de-load activities. Therefore, the firm places more emphasis on four-week trends, where Celsius’s sales were down by mid-single digits for both the latest and prior four-week periods.
In contrast, sales growth for Alani Nu, another brand in the energy drink market, has shown a significant increase, with year-over-year sales surging by more than 100%. Alani Nu’s market share also grew by +20 basis points sequentially, reaching approximately 5.5%. The combined market share of Celsius and Alani Nu increased by +20 basis points in the last two weeks and by +80 basis points sequentially for the last four weeks.
Despite these market share gains, the analyst expressed caution regarding Celsius’s stock, pointing to the ongoing weak retail sales for the Celsius brand and potential consumer overlap between Celsius and Alani Nu. The commentary suggested that the strategic moves being made may be from a defensive position rather than one of market strength. The firm’s stance on Celsius Holdings remains unchanged, holding at an Equalweight rating with a $42.00 price target. Based on current metrics, the stock trades at high valuation multiples across several measures, though InvestingPro analysis suggests the company could be undervalued. Subscribers can access 18 additional ProTips and a comprehensive Pro Research Report, which provides deeper insights into the company’s financial health, growth prospects, and market position.
In other recent news, Celsius Holdings has announced its anticipated acquisition of Alani Nutrition, with the deal expected to close in April 2025. The acquisition follows the expiration of a key waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. In leadership changes, Celsius appointed Eric Hanson as President and Chief Operating Officer, effective March 24, 2025. Hanson, who brings extensive industry experience from his previous role at PepsiCo (NASDAQ:PEP), is expected to play a crucial role in the company’s growth strategy. Analyst firms Needham and Jefferies have both raised their price targets for Celsius Holdings to $40, maintaining Buy ratings on the stock. The analysts view the Alani Nu acquisition positively, expecting it to boost earnings and market share. Needham highlighted the company’s better-than-expected recent quarterly performance, leading to revised forecasts for revenue and earnings. Jefferies also noted the acquisition’s potential to significantly increase Celsius’s sales and adjusted EBITDA in 2025. These developments reflect the company’s strategic initiatives and expected financial growth.
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