Celsius Holdings Inc. (NASDAQ:CELH) was started with a Buy rating and $217 per share price target by analysts at Jefferies on Monday.
The firm said in a note that with the company having "only 4% Energy+ share and Pepsi's distribution support," they believe its 2023 sales grow +26% CAGR through 2027 to $3.3 billion.
"Celsius has only 4% market share of its true addressable market, vs. 9% of Energy," said the analysts at Jefferies. "Energy+ (adding sports drinks, RTD tea/coffee) is a $81b category, 3.6x larger than energy drinks. It's expected to grow +6% or $5b annually (Euromonitor). We think Celsius' broad appeal justifies looking at the opportunity through this lens."
The firm also noted that CELH is entering the Canadian and European markets. "We think the brand can travel," they stated. "Managing the pace of growth is critical, but we are confident that management will take a measured approach. We model International reaching $185m by '27 (6% of sales)."
Over the long term, Jefferies thinks Celsius will follow the scale-beverage playbook, extending beyond energy, with low caffeine and hydration appearing to be the easy next steps. However, they aren't yet incorporating new launches into their estimates and see CELH's core portfolio continuing to drive near-term growth.