TD Cowen raises Celsius stock price target to $37.00

On Wednesday, TD Cowen exhibited a cautiously optimistic stance on Celsius Holdings (NASDAQ:CELH), as analyst Robert Moskow increased the price target to $37.00 from the previous $35.00, while reaffirming a Hold rating on the stock. The adjustment follows the company’s first-quarter earnings, which did not meet the financial services (FS) consensus for revenue and earnings. Despite the miss, InvestingPro data shows the company maintaining robust financials with $1.33 billion in revenue and a healthy 50.43% gross margin over the last twelve months.

Celsius Holdings, known for its fitness drinks, recently reported quarterly figures that fell short of market expectations on both the top and bottom lines. While the stock trades at relatively high multiples according to InvestingPro metrics, the focus has shifted to the potential growth from the recent combination of Celsius with Alani Nu, a brand also in the health and wellness segment.

Moskow noted that while there is positive momentum for Alani Nu, the core Celsius brand’s performance is still crucial for the company’s success. He believes that the improvement of the Celsius brand is fundamental to the bullish case for the stock. Supporting this view, InvestingPro analysis shows the company maintains excellent financial health with a "GREAT" overall score and strong liquidity, with current assets more than triple its short-term obligations. The analyst anticipates that management will provide more details on the combined entity’s future during a call scheduled for later in May 2025.

The integration of Alani Nu into the Celsius portfolio is expected to energize the company’s narrative. However, Moskow highlighted that there are still many questions regarding pro forma modeling that need to be addressed to better understand the full impact of the acquisition on Celsius’s financials.

Investors and analysts alike are looking forward to the aforementioned call, where management is expected to clarify the strategic and financial implications of the Celsius and Alani Nu combination. This information will be crucial for stakeholders to assess the long-term trajectory of Celsius Holdings.

In other recent news, Celsius Holdings reported its Q1 2025 earnings, revealing a slight miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.18, falling short of the expected $0.20, while revenue reached $329.3 million, below the anticipated $348.62 million. Despite this, Celsius saw international revenue grow by 41%, demonstrating strong global expansion. Gross margin expanded by 110 basis points to 52.3%, indicating improved operational efficiency. New product launches and strategic acquisitions are underway to drive future growth, with the recent acquisition of Elani Nu expected to strengthen Celsius’s market position.

In analyst news, BofA Securities maintained its Underperform rating on Celsius Holdings with a price target of $30.00. The firm highlighted complexities in assessing the company’s first-quarter results due to distribution expansion and increased promotional activities. BofA noted a slight year-over-year sales decline in scanned retail channels and anticipates an improvement in consumption as the quarter progresses. However, increased promotional activities may negatively affect sales in the second quarter before potentially becoming a sales driver in the second half of 2025. The report also mentioned Alani Nu, a brand under Celsius Holdings, with expectations for inventory increases to impact its gross margin.

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