Celsius Shares Surge Following Needham's Buy Rating Initiation
On Friday, Celsius Holdings Inc. (NASDAQ: CELH), known for its CELSIUS energy drink brand, saw an increase of over 4% in morning trading. This uptick followed the initiation of coverage by Needham analysts, who issued a buy recommendation and set a price target of $38. The firm also added Celsius Holdings to its conviction list, demonstrating strong confidence in the stock's potential.
Needham analysts presented an optimistic outlook for Celsius Holdings despite the recent slowdown in consumer purchasing trends. They indicated brighter forecasts for the company heading into 2025 and emphasized its position as a third player in the energy drink sector. Analysts noted that the increasing consumer preference for zero-sugar products and healthier categories overall would help accelerate the company's revenue growth.
The initiation of coverage came after a significant decline in the share price of Celsius Holdings, with the stock having dropped approximately 70% from its peak value. Needham analysts pointed out that the current valuation is considerably more attractive compared to the spring of last year. They also expressed confidence that the company would overcome inventory optimization challenges, aligning sales rates more closely with reported outcomes.
Needham's addition of Celsius Holdings to its conviction list reflects a strong belief in the company’s ability to recover and grow in the near future. Analysts emphasized that the healthier segment of the energy drink market has improved after historically underperforming compared to growth rates, and this improvement is expected to remove a significant barrier to the company's performance alongside easing inventory pressures.
In summary, Needham analysts maintain a positive view on Celsius Holdings' revenue growth and market positioning potential. They believe they have adjusted their expectations for the company and view the stock as currently positioned for a compelling valuation, setting the stage for positive developments in the coming years.