Celsius Holdings’ (CELH) stock has been given a bullish upgrade from analysts at TD Cowen (TSE:TD).
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The Wall Street brokerage upgraded CELH stock to Buy from Hold and raised its price target on the shares to $55 from $37. News of the upgrade sent Celsius’ share price up 7% on June 16 to $43.97. The new price target from TD Cowen is nearly 30% above where the stock currently trades despite the latest rally.
The bullish note is welcome news at Celsius, whose stock has been on a rollercoaster over the past year. The share price hit a record high in mid-February only to plunge about 80% by mid-March. However, CELH stock has quickly recovered along with the broader market for a total gain so far this year of 66%.
Strong Market
The swift recovery of CELH stock has been helped by a strong energy drink market. The energy drink category’s annual growth rate over the last four years has been nearly triple the food and beverage sector at 10% per annum. At the same time, price mark-ups for energy drinks have declined, making them more affordable relative to soft drinks, and more appealing to price-sensitive consumers, says TD Cowen.
“We believe relative affordability is an important consideration for consumers in a weaker macroeconomic backdrop, and will further boost energy drink’s ‘share of throat’ at the expense of other drink categories,” wrote TD Cowen in a note to clients. Celsius is currently the third-largest energy drink company behind market leaders Red Bull and Monster Beverage (MNST).
Is CELH Stock a Buy?
The stock of Celsius has a consensus Moderate Buy rating among 16 Wall Street analysts. That rating is based on 12 Buy, two Hold, and two Sell recommendations issued in the last three months. The average CELH price target of $44.57 implies 1.51% upside from current levels.
