Celsius Holdings (NASDAQ:CELH) experienced a significant decline of 5.7% in late morning trading on Monday, reaching its lowest level of the year and approaching the 52-week low of $45.03. This drop was attributed to B. Riley Securities lowering their estimates on the energy drink company and reducing their price target to $80. Analyst Jeff Van Sinderen highlighted that while CELH sales are still growing, the rate of growth has slowed significantly, partly due to challenges within the broader energy drink category.
Moreover, Morgan Stanley cautioned investors about difficult sales comparisons for Celsius Holdings in the upcoming quarters as the company navigates through the distribution and velocity growth following the PepsiCo distribution deal. Despite these concerns, Seeking Alpha analyst Ironside Research defended Celsius, suggesting that while there may be a risk of declining demand for energy drinks overall, more data is needed before determining the future of the market. The analyst also noted that Celsius’ growth story may have entered a new chapter, but management appears equipped to address any challenges.
Looking ahead, Celsius Holdings is set to report its Q2 earnings in the first two weeks of August. However, 11 out of the last 13 EPS revisions for the quarter have been downward, signaling potential challenges in the company’s financial performance. Options trading indicates a projected 9% share price swing following the earnings release, adding to the uncertainty surrounding Celsius’ future performance.
Despite the recent stock decline and concerns raised by analysts, some investors remain optimistic about Celsius Holdings’ long-term prospects. The company has carved out a niche in the competitive energy drink market with its unique product offerings and strategic partnerships. Additionally, Celsius has demonstrated resilience in the face of evolving consumer preferences and industry trends, positioning itself for continued growth in the future.
It is essential for investors to closely monitor Celsius Holdings’ upcoming earnings report and management’s guidance to gain a better understanding of the company’s performance and outlook. By staying informed and evaluating all available data, investors can make well-informed decisions regarding their investment in Celsius Holdings and navigate the volatility in the energy drink sector effectively.
