Sell Rating on Celsius Holdings Due to Complex Q1 Results and Uncertain Future Outlook

Celsius Holdings (CELH – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Jonathan Keypour from Bank of America Securities reiterated a Sell rating on the stock and has a $30.00 price target.

Jonathan Keypour has given his Sell rating due to a combination of factors impacting Celsius Holdings. The company’s first-quarter results were more complex than anticipated, with underlying demand obscured by previous distribution expansions and promotional activities. This has resulted in a notable discrepancy between scanner data and reported outcomes, making it challenging to gauge true demand. Additionally, the anticipated promotional activities in the second quarter are expected to negatively impact sales before potentially becoming a positive factor in the latter half of fiscal year 2025.
Furthermore, sales and EBITDA projections have been lowered due to sluggish scanner data and increased advertising expenses, which are expected to affect margins. The uncertainty surrounding the Alani Nu brand’s performance and its impact on gross margins adds to the cautious outlook. The reiterated Underperform rating and a price objective of $30 reflect concerns about the trajectory of legacy Celsius sales and the need for further clarity on Alani’s margin structure. These factors justify the significant discount applied compared to competitors like Monster Energy.

In another report released on April 25, CFRA also downgraded the stock to a Sell with a $30.00 price target.