Investing.com — TD Cowen downgraded Celsius Holdings (NASDAQ:CELH) to Hold and slashed its price target for the stock to $29 from $40 in a note Wednesday, citing slowing sales growth, intensifying competition, and concerns about business momentum.
“We downgrade Celsius to Hold and reduce our PT to $29,” analysts wrote. “Our tracking data indicates a deceleration in sales growth to 0.3% in the L4W, compared to +3.7% L12W and +22.3% L52W even thought the energy drink category has recovered to MSD.”
“Velocity ($/TDP) declined double-digit,” TD Cowen added, warning that this trend could jeopardize Celsius’ ability to maintain or expand shelf space.
Celsius’ market share has slipped to 9.1%, down from its peak of 10.9% in May 2024, according to TD Cowen.
They state that the energy drink category is becoming increasingly crowded, with challenger brands adopting similar “better-for-you” positioning.
TD Cowen analysts also note that fast-growing competitor Alani Nu is directly targeting Celsius’ core demographic of health-conscious, female-forward consumers. Additionally, Red Bull’s expanded support for its sugar-free line has gained market share at Celsius’ expense.
TD Cowen expressed concerns about valuation. “If Celsius can’t demonstrate a path back to growth, it could end up being valued at a multiple more similar to other ex-growth CPG companies,” the note stated, warning that the stock could fall to $20 if it trades at 3.0x trailing sales.
While acknowledging potential upside if PepsiCo (NASDAQ:PEP), Celsius’ biggest distributor, decides to acquire the company, TD Cowen noted that PepsiCo has recently downplayed Celsius’ performance in earnings calls.
With TD Cowen lowering its 2025 sales growth estimate to 8% and its 2025 EPS forecast to $0.81 (down from $0.93 consensus), analysts cautioned, “Celsius’ growth story has cooled.”
