On Wednesday, Truist Securities sustained its Hold rating on shares of Celsius Holdings (NASDAQ: NASDAQ:CELH), with a consistent price target of $35.00. The firm's analyst commented on the stock's performance, noting its status as one of the most polarizing and volatile on their watch list.
This observation aligns with InvestingPro data showing a beta of 1.76 and a significant 54% decline over the past six months. Celsius Holdings frequently experiences significant weekly price movements, often fluctuating by 3-5% in response to scanner data releases.
The decision to maintain the Hold rating, which was originally assigned in April, stemmed from an assessment that investor optimism was overly positive at the time.
Despite strong fundamentals, including a healthy current ratio of 4.71 and robust revenue growth of 19.4% in the last twelve months, Celsius had become the first brand to exceed a 10% market share, and there was a prevailing expectation that, with the support of the distribution partnership with PepsiCo (NASDAQ:PEP, NR), its market share would climb to 20%.
However, since the spring, Celsius's market share has plateaued, hovering between 10-11%. The collaboration with PepsiCo has also faced challenges. The analyst pointed out that issues with the partnership have adversely affected Celsius's third-quarter results, specifically referencing a significant destocking event.
The Hold rating reflects a cautious stance on the stock, suggesting that Truist Securities advises investors to maintain their current position without adding to or reducing their holdings. The $35.00 price target indicates the firm's estimation of the stock's fair value, based on their analysis.
In other recent news, Celsius Holdings has experienced several significant changes. Morgan Stanley (NYSE:MS) has lowered its target for the company to $42, reflecting a dip in market share and a more conservative outlook on future earnings.
The firm has also reduced its revenue estimates for Celsius Holdings for 2025 and 2026 by 4% and 6%, respectively. The company's fourth-quarter revenue projections were also revised downward by 6% to $326 million, despite growth in the energy category.
Furthermore, Deutsche Bank (ETR:DBKGn) has initiated coverage of Celsius Holdings with a Hold rating, citing potential for a rebound in the energy drink sector by 2025. JPMorgan (NYSE:JPM) also initiated coverage with an Overweight rating due to improving category trends. Meanwhile, Morgan Stanley maintained its Equalweight rating on Celsius Holdings, observing a slight deceleration in the company's year-over-year sales growth.
In other developments, Celsius Holdings reported a significant decrease in third-quarter revenue for 2024, falling 31% to $265.7 million from $385 million in the same quarter last year. The company also reported a sharp decline in net income to $6.4 million, down 92% from the previous year's $83.9 million.
However, Needham initiated coverage on Celsius Holdings, bestowing a buy rating and setting a price target of $38, forecasting brighter prospects for the company looking ahead to 2025. These are recent developments for the company, which maintains a strong cash position with over $900 million in reserves and plans to drive growth through promotional activities and new product launches into 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.