Morgan Stanley has upgraded Celsius Holdings to Overweight from Equal-weight, raising its price target to $70 from $61, citing improving sales momentum and stronger brand positioning.
“We see another leg up in CELH driven by a greater than expected reacceleration in topline growth with Alani’s transition to PEP and improving Celsius growth,” the analysts wrote.
They added that brand Celsius “has returned to growth following last year’s sharp slowdown, and we expect further improvement with much easier comparisons from December through early June.”
Alani, which accounts for around 40% of sales, has moderated after outsized second-quarter growth but remains “robust ahead of its move to the PEP system, which should accelerate growth,” Morgan Stanley said.
The bank also highlighted the benefit of a new captaincy agreement with PepsiCo, which gives Celsius “increased space within PEP’s beverages set and control over which SKUs get prioritised in the energy planograms.”
Morgan Stanley noted a favourable pricing environment in the category, pointing out that Monster Beverage’s U.S. price increase for the fourth quarter “provides an opportunity for CELH to take pricing in an inelastic category.”
Looking ahead, the analysts said they have “increased confidence in our FY26/27 estimates, with our revenue 9%/8% above consensus, and our Adjusted EBITDA 8%/7% above.”
The $70 price target is based on 23 times FY27 EV/EBITDA, in line with the firm’s multiple for Monster.
Despite Celsius stock being up about 80% over the past year, shares have pulled back 10% in the past month. Morgan Stanley sees an “attractive 2:1 bull/bear skew from here.”
Source :
https://www.investing.com/news/stock-market-news/celsius-upgraded-to-overweight-at-morgan-stanley-on-growth-momentum-4263455
