Celsius Holdings (CELH) PT Lowered to $42 at Morgan Stanley

Morgan Stanley analyst Eric Serotta lowered the price target on Celsius Holdings (NASDAQ: CELH) to $42.00 (from $46.00) while maintaining a Equalweight rating.

The analyst comments "Lowering Estimates On Market Share Weakness and 4Q Promo Headwinds: We are lowering our 4Q24 revenue estimate for CELH by 6% to $326M vs the $335M consensus. While energy category growth in Nielsen tracked channels has improved from +1.0% in 3Q to +5.5% in 4QTD, CELH's market share has slipped from 9.6% to 9.0% (with 4 of the past 5 weeks <9%) amid improved performance for Red Bull, Monster, and Alani Nu, particularly in the sugar-free segment. We continue to expect an approximately -$15M headwind in 4Q from PEP inventory reduction, but after further review of our model now expect a ~$25M contra-revenue headwind vs $10M previously due to (1) a tough comp for promotional accruals, with 4Q23 at ~18% of gross sales vs the typical low 20%s, (2) moderately increased promotional activity y/y, and (3) the Pepsi incentive which was not in 4Q23 results. We are also lowering our 2025/2026 revenue estimates by 4%/6%, respectively, to reflect more muted market share expectations, and our PT from $46 to $42."

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