Asahi shares mark weekly slide after cyberattack halts production
Investing.com -- Goldman Sachs initiated coverage of Celsius Holdings with a Buy rating and a $72 price target, saying the fast-growing energy drink maker is well placed to expand market share and margins in a energy drink category that is outpacing the broader consumer staples sector.
The brokerage called Celsius “one of the best growth stories in consumer packaged goods,” on its gains in the U.S. energy drink market, where it now holds about 17% share.
Goldman said it expects Celsius to reach more than 20% by 2026, helped by new product launches, wider shelf placement and its acquisition of Alani Nu.
The analysts pointed to several growth levers, including international expansion, currently just 3% of sales, and greater consumer use.
“We see a long runway of volume-led double-digit topline growth and margin expansion,” GS analysts said.
Goldman also sees scope for Celsius’ gross margins to improve toward levels seen at Monster Beverage as scale efficiencies in procurement and production take hold, though it cautioned that margin gains will be gradual while the company remains in growth mode.
Despite a 106% rally in Celsius shares this year, GS said the valuation remains attractive relative to its history and peers.
The stock trades at a 54% premium to beverage peers, below its three-year average premium of 78%.
“We believe the market is underappreciating upside from further share gains and margin expansion over the next several years, which should drive a continued re-rating of the stock,” Goldman said.