On Thursday, Roth/MKM made a revision to its price target for Celsius Holdings (NASDAQ:CELH), bringing it down to $75 from the previous $87, while still maintaining a Buy rating on the stock. The adjustment reflects a broader slowdown in the energy drink sector, which has transitioned from robust double-digit growth in the third quarter of 2023 to a period of stagnation or decline in recent weeks.
The analyst noted that Celsius Holdings has not been immune to the industry's challenges, with sales growth tapering off as evidenced by recent scan data.
Consequently, Roth/MKM has revised downward its revenue and AEBITDA forecasts for the company for the periods extending beyond the second quarter of 2024. Despite the tempered financial expectations and the lowered price target, the firm continues to endorse a Buy rating for the beverage company's shares.
Celsius Holdings, known for its energy drinks, has experienced a shift in the market dynamics, mirroring the slowdown observed across the energy drink category. This has prompted analysts to reassess their expectations for the company's financial performance in the upcoming quarters.
The revised price target of $75 represents a recalibration of the stock's potential in light of the current market conditions affecting the sales of energy drinks. While the industry faces headwinds, Roth/MKM's sustained Buy rating indicates a continued confidence in the long-term prospects of Celsius Holdings despite the near-term market softness.
In other recent news, Celsius Holdings has been the focus of several analyst ratings and adjustments. Morgan Stanley (NYSE:MS) maintained its Equalweight rating on Celsius, citing a deceleration in the company's sales growth and a decrease in market share.
The firm also noted a drop in the rate of product sales, despite a 20% rise in sales in the most recent week. Truist Securities initiated coverage on Celsius with a Hold rating, predicting a year-over-year revenue increase of 24.3% to $1.638 billion in FY24.
Maxim (NASDAQ:MXIM) Group, while maintaining a Buy rating, lowered its price target for Celsius due to inventory reductions by PepsiCo (NASDAQ:PEP) and a slight decline in several of the company's performance metrics. In contrast, Piper Sandler confirmed its Overweight rating on Celsius, citing the company's potential for sustained sales growth despite inventory adjustments by PepsiCo. The firm revised its sales forecast for 2024 and 2025 accordingly.
InvestingPro Insights
In light of the recent market adjustments and analyst revisions for Celsius Holdings (NASDAQ:CELH), investors may find additional context through real-time data and insights. According to InvestingPro, Celsius Holdings boasts a strong cash position, holding more cash than debt on its balance sheet, which may provide resilience in a challenging market. Furthermore, analysts are still anticipating sales growth in the current year, suggesting a potential rebound or continued expansion despite recent industry slowdowns.
The real-time metrics from InvestingPro highlight a substantial Revenue Growth of 81.22% over the last twelve months as of Q1 2024, an impressive Gross Profit Margin of 49.62%, and a robust Return on Assets of 17.93%. These figures underscore the company's ability to generate profit from its assets and maintain a high level of efficiency in its operations. Additionally, the P/E Ratio stands at 54.93, which reflects investor expectations of future earnings potential relative to the current share price.
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