On Thursday, Jefferies adjusted its stock price target for Celsius Holdings (NASDAQ:CELH), a beverage company, reducing it to $98 from the previous $104 while maintaining a Buy rating on the stock. The revision follows the announcement from Celsius that its distributor, Pepsi, is planning to reduce inventories by $20-30 million. This decision comes in the wake of a $45 million inventory cut in the first quarter.
Celsius's inventory reduction is seen as a typical phase in the second year of national distribution, albeit it was larger than expected. Despite the current adjustments, the outlook for Celsius's growth in 2024 is still viewed positively. The company, like others in the beverage industry, is not resistant to the general slowdown affecting all categories within the sector. The analyst suggests that the market is currently experiencing a temporary dip in activity.
The report also indicates that Celsius is expected to realize further operational efficiencies, which should enhance profit margins. While the price target has been adjusted, the firm's long-term perspective on Celsius Holdings remains unchanged. The analyst emphasizes that the core narrative for the company is still intact, although the situation warrants close observation moving forward.
In other recent news, Celsius Holdings has been the subject of several analyst evaluations. TD (TSX:TD) Cowen lowered the price target for Celsius shares to $85 but maintained a Buy rating, reflecting the company's anticipated additional $20-30 million headwind in the second quarter due to inventory reductions by Pepsi.
Stifel financial firm also cut its price target for Celsius shares to $85, citing solid demand and anticipating sales growth to exceed 20% annually through 2025. CFRA initiated coverage on Celsius Holdings with a Hold rating and a $65 price target, acknowledging the company's emergence as a significant competitor in the energy drinks sector.
Piper Sandler maintained an Overweight rating for the company, with a steady price target of $90, emphasizing the potential for volume-driven market growth. BofA Securities raised the stock's price target to $84 from $80, adjusting its sales forecast from $385 million to $390 million.
Celsius Holdings reported a substantial 37% year-over-year revenue increase for the first quarter of 2024, reaching a new high of $355.7 million. The company's second-quarter sales are estimated at approximately $400 million, representing about 23% growth year-over-year.
These developments reflect recent analyst evaluations and performance metrics for Celsius Holdings. It is important to note that these are recent developments and do not serve as a comprehensive view of the company's performance.
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