On Monday, Stifel, a financial services firm, upgraded its price target for Celsius Holdings (NASDAQ: NASDAQ:CELH), a popular energy drink company, from $90 to $95, while reiterating a Buy rating on the stock. This adjustment reflects the firm's positive outlook on the company's future performance and market share growth.
Celsius Holdings' Chief of Staff, Toby David, and Head of IR/Corporate Communications, Paul Wiseman, recently participated in meetings at Stifel's inaugural Jackson Hole Consumer Ski Summit. Following these discussions, Stifel reported strong indicators of continued robust end demand for Celsius products. The firm anticipates that Celsius will sustain double-digit sales growth through 2024, driven by an expansion of U.S. distribution and solid sales velocities.
Stifel forecasts a minimum of 30% growth in distribution points for Celsius, which is expected to come from both new innovations and existing products. The recent product launch of Celsius Essentials has been a significant contributor to distribution gains year-to-date. Analysts at Stifel predict that Celsius' market share, which is currently estimated at about 12% based on new Circana data that includes figures from Costco (NASDAQ:COST) and Amazon (NASDAQ:AMZN), is on track to increase to approximately 13% by the end of March and 14% by June.
The firm's maintained Buy rating and increased price target to $95 are based on 39 times the projected 2025 EBITDA. The new target price suggests a modest upside to the first half of 2024 consensus expectations. Stifel's stance is to recommend adding to positions in Celsius Holdings during any market weakness, citing the stock's strong performance since the announcement of fourth-quarter 2023 results.
InvestingPro Insights
In light of Stifel's upgraded price target for Celsius Holdings, recent metrics and InvestingPro Tips provide additional context to the company's financial health and market position. Celsius Holdings boasts a robust market capitalization of $19.61B, reflecting significant investor confidence in the company. The revenue growth has been particularly impressive, with a staggering 101.65% increase over the last twelve months as of Q4 2023. This aligns with Stifel's optimism regarding the company's ability to sustain double-digit sales growth through the expansion of U.S. distribution and robust sales velocities.
Moreover, Celsius Holdings' P/E ratio stands at 106.7, suggesting a high valuation by the market relative to near-term earnings. However, the PEG ratio of 0.61 indicates potential for growth when considering the earnings trajectory, which might justify the higher P/E ratio. The company's financial strength is further highlighted by the fact that it holds more cash than debt on its balance sheet, an InvestingPro Tip that underscores its solid financial footing.
Investors should note that while analysts anticipate sales growth in the current year, there have been two downward earnings revisions for the upcoming period. Additionally, the stock's RSI suggests it is in overbought territory, which could signal caution for potential buyers. For those seeking a more comprehensive analysis, InvestingPro offers an additional 20 InvestingPro Tips for Celsius Holdings, which can be accessed at: https://www.investing.com/pro/CELH. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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