According to TD Cowen, Celsius Holdings plans to reach a global stage, making it an attractive investment opportunity. The company initiated coverage of the energy drink stock with an outperform rating and a price target of $250 per share. TD Cowen’s forecast calls for a 23.8% upside from Thursday’s closing price of $201.94. “As a strong No. 3 player in the U.S. energy drink category, the growing popularity of Celsius’ differentiated products is transforming the category and driving significant new, increasing consumer engagement,” analyst Vivien Azer said in a note Thursday. “This supports further market share gains in the US as the [PepsiCo] “The partnership creates a credible international opportunity.” Celsius shares have risen more than 90% so far this year, resulting in a compound annual growth rate (CAGR) of about 80% and a market share of 8% over the past five years. 5% for US energy drinks. She added that Celsius is seeing outsized growth among women and higher-income earners compared to its peers. The beverage brand’s popularity has soared – and not just in the U.S. Following PepsiCo’s $550 million investment in Celsius, announced in August 2022, as part of a long-term distribution deal, Azer noted that Celsius is expanding its distribution throughout the country in this has “significantly” expanded this year so far and will continue to do so in opportunities to grow internationally in 2024. The analyst added that Celsius will deliver normalized gross margin in 2023 with potential for future improvement. “We recognize that an international launch could put pressure on margins… and with valuation pegged to the top.” “We believe this is an acceptable trade-off for investors,” she said. The company expects revenue growth of 98% and 35% for fiscal years 2023 and 2024, respectively. —CNBC’s Michael Bloom contributed to the report.
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