Shares of Celsius Holdings Inc. (NASDAQ:CELH) plunged as much as 15% Tuesday after Morgan Stanley analysts said data showed the company's year-on-year sales growth slowed on a sequential basis.
In its latest note, the bank revealed Celsius's market share (excluding powders) declined sequentially from 10.8% three weeks ago to 10.5% in the latest week (although its share is higher in other services, such as Costco and Amazon).
"CELH percentage sales on promotion increased sequentially in the last three weeks, with CELH pricing down -7% y/y in the latest two weeks," said Morgan Stanley. "CELH velocity was down -4% y/y in the latest week and -1% for the L4W, with 2-year average velocity growth +HSD reflecting strong year-ago growth."
Morgan Stanley maintained an Equal Weight rating and a $75 per share price target on Celsius.
Analysts noted the robust runway for the company in the US from increasing items per store, improving placements in coolers, and growth in non-tracked channels. However, they also believe the company has difficult comparisons over the next several quarters as it cycles the distribution and velocity growth since the PepsiCo distribution began.
Morgan Stanley concluded that there is a "balanced risk/reward from here after the recent stock run."