On Wednesday, TD Cowen exhibited a cautious stance on Celsius Holdings (NASDAQ:CELH) by reducing the price target for the company's shares. The new price target stands at $85.00, a decrease from the previous target of $95.00. Despite this adjustment, the firm retains a Buy rating on the stock.
The revision of the price target by TD Cowen comes after recent statements from Celsius Holdings' management. These comments indicated that the company is expecting an additional $20-30 million headwind in the second quarter due to Pepsi inventory reductions. This comes in addition to the roughly $25 million impact that was already communicated during the first quarter earnings.
In light of these developments, TD Cowen has revised its sales estimates for Celsius Holdings, factoring in a further reduction in Pepsi's inventory days. The firm's analyst cited the inventory adjustments as the primary reason for the lowered price target.
Despite the near-term challenges posed by the inventory reductions, TD Cowen continues to endorse a Buy rating for Celsius Holdings. The firm's analyst believes that the underlying demand for the company's products remains strong and that the current headwinds do not reflect a decrease in market appetite.
The price target adjustment to $85.00 reflects a recalibration of expectations in the face of inventory management dynamics between Celsius Holdings and its distribution partner, Pepsi. The maintained Buy rating signals TD Cowen's confidence in the company's fundamental strength and market position.
In other recent news, Celsius Holdings reported a substantial 37% year-over-year revenue increase for the first quarter of 2024, reaching a new high of $355.7 million. The company's second-quarter sales are estimated at approximately $400 million, representing about 23% growth year-over-year. Stifel financial firm reduced its price target for Celsius shares to $85 but maintained a Buy rating, while CFRA initiated coverage with a Hold rating and a $65 price target. Piper Sandler, maintaining an Overweight rating, emphasized the company's potential for volume-driven market growth. BofA Securities increased the stock's price target to $84 from $80, adjusting its sales forecast from $385 million to $390 million. Morgan Stanley maintained its Equalweight rating and $75.00 price target, acknowledging potential for expansion in the U.S. market. These developments reflect recent analyst evaluations and performance metrics for Celsius Holdings.
InvestingPro Insights
In the wake of TD Cowen's updated stance on Celsius Holdings (NASDAQ:CELH), real-time data from InvestingPro provides a broader financial context for investors. The company holds a market capitalization of $14.31 billion and is trading at a high Price / Book multiple of 42.52 as of the last twelve months up to Q1 2024, which could indicate a premium valuation compared to tangible assets. Despite recent price volatility, with a 1-week total return of -11.5% and a 1-month return of -20.52%, the company has experienced significant revenue growth of 81.22% during the same period.
Two notable InvestingPro Tips highlight that Celsius Holdings has more cash than debt on its balance sheet and that analysts expect sales growth in the current year. This could reassure investors about the company's financial health and its ability to navigate short-term challenges. Additionally, the company's strong revenue growth is a positive sign that may align with the analyst's view on the underlying demand for its products.
For a deeper analysis and additional insights, investors can explore more InvestingPro Tips on Celsius Holdings. With 19 additional tips available, these can further guide investment decisions. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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