Lighter inventory and a reacceleration of growth are the right mix for Celsius Holdings (NASDAQ:CELH) following a rough patch, JPMorgan said.
Analyst Andrea Teixeira initiated coverage of the energy drink stock on Thursday with an overweight rating, citing those two themes as reasons for optimism. Teixeira’s $37 price target implies upside of 24.3% over Wednesday’s closing level.
“We think the deceleration in the energy drink category in the U.S. does not invalidate CELH secular tailwinds that should lead to consistent top-tier growth within staples,” Teixeira said.
Celsius is the third largest energy drink brand in the U.S., Teixeira said. The analyst noted that it’s connected to several consumer megatrends including functionality and a lack of sugar.
Shares took on 96 cents, or 3.2%, early Thursday trading to $30.72 on the back of Teixeira’s call. However, it has been a tough year, with the stock tumbling more than 45% in 2024. With that performance, Celsius is tracking for its first negative year since 2018.
