Energy Drink Firm Poised for Rebound
A prominent analyst has initiated coverage on Celsius Holdings, Inc. (NASDAQ:CELH), assigning a Buy rating and a price target of $38. This optimistic outlook is rooted in the company’s strong positioning as the third-largest player in the energy drink market.
Favorable Market Conditions
The energy drink category is expected to rebound, driven by growing demand for zero-sugar products. This shift in consumer preferences creates a favorable environment for revenue acceleration, particularly as the company faces easier year-over-year comparisons. While Celsius Holdings recently experienced its first year-over-year share loss, the analyst remains encouraged by the category’s return to a high single-digit growth rate.
Innovations and Inventory Optimization
The company has several innovations planned for 2025, which are expected to drive growth. Furthermore, inventory optimization challenges are being resolved, leading to improved alignment between sell-through and reported results.
Financial Projections
The analyst estimates full-year 2024 revenue and EPS of $1.365 billion and $0.68, respectively, and $1.548 billion and $0.93 in fiscal year 2025.
Capital Allocation Programs
When evaluating a stock, investors should consider factors beyond valuation metrics and price action. Capital allocation programs, such as dividend payments and share buybacks, can significantly impact a company’s attractiveness to investors. While Celsius Holdings does not pay a dividend, it has other means of returning value to shareholders.
Buyback Programs and Share Price Support
Buyback programs can serve as a support for share prices, providing a backstop for demand. Investors can stay informed about Celsius Holdings’ buyback programs by monitoring the latest news and announcements.
Current Market Performance
CELH shares are currently trading at $27.94, up 0.17% at the last check on Friday.
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