Proactive Investors - Celsius Holdings (NASDAQ:CELH) has been downgraded from ‘Buy’ to ‘Neutral’ by analysts at the Bank of America (NYSE:BAC) (BoA) who believe uncertainties have skewed the risk/reward profile for the energy drink company.
The analysts believe that while the company pushes to take shelf space and market share in 2024, its growth will level out against tough comparisons and stepped-up competition.
“Celsius’ US sales continue to be very strong with considerable opportunity supported by rising consumer awareness,” they wrote in a note to clients.
“However, it remains unclear if recent market share and velocity (dollar sales per points of distribution) declines are merely seasonal or not.”
They highlighted that competition could weigh on Celsius’ growth this year as Monster pushes to expand Reign Storm and reclaim lost Bang distribution and Red Bull maintains strong marketing.
“Looking at a range of scenarios, our base case supports a $65 price objective and our best and bear cases reflect balanced upside and downside, hence our ‘Neutral’ rating,” the BoA analysts wrote.
On their price objective of $65, the analysts noted that at the time of writing, the stock was up 10% in the year-to-date compared to a flat S&P 500.
It traded down 7.2% at $55.30 in early trade on Friday.