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Shares of Celsius Holdings Inc. (NASDAQ:CELH) jumped on Tuesday, extending a week-long streak of gains for the energy company’s stock. Morgan Stanley upgraded its rating to Overweight and raised the price target to $70 from $61.
What To Know: Celsius shares are rising Tuesday after analysts at Morgan Stanley upgraded Celsius to Overweight. The rally in shares has cooled since the market open, but the stock was still trading slightly above its opening price at last check, according to Benzinga Pro.
Morgan Stanley’s Eric Serotta anticipates a reacceleration of top-line growth that is greater than what analysts are forecasting.
The company experienced a slowdown of sales in its Alani Nu product last year, but Serotta is confident that an expected switch to the PepsiCo distribution system this December will accelerate growth by targeting distribution sites like universities and hotels. Alani Nu makes up 40% of Celsius’s revenue.
“We see another leg up in CELH’s stock,” the analyst wrote in a note to clients.
Serotta also sees favorable pricing dynamics ahead for Celsius after competitor Monster Beverage Corp. (NASDAQ:MNST) raised the prices of its energy drinks, which compete with Celsius’s offerings.
Serotta has increased confidence that the brand can grow in line or ahead of its category because of its new COO, who joined the company in March. He’s also optimistic about the Pepsi deal, since Celsius will no longer compete with Pepsi in energy drinks as a result.
“We see a 2:1 bull/bear case skew from here,” the analyst said.
CELH Price Action: Celsius shares were up 1.06%, trading at $57.51 at the time of publication, according to Benzinga Pro. Celsius has a 52-week range of $21.10 to $63.50.
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