Energy Drink Stock Doubles: Goldman Predicts Further Growth
- Goldman Sachs reaffirmed its "Buy" rating for Celsius holdings (CELH), predicting continued strong growth and margin expansion for the functional energy drink company.The firm believes the market is...
- Analyst Bonnie Herzog,in a research note,highlighted Celsius's position within the rapidly expanding better-for-you energy drink category.
- The core driver of Celsius's momentum is its exposure to the attractive energy drink market, which Goldman Sachs expects to grow by 12% in 2024.
Goldman Sachs Reiterates Buy Rating for Celsius, Citing Growth Potential
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Published September 11, 2024, 11:11 AM EDT
Goldman Sachs reaffirmed its “Buy” rating for Celsius holdings (CELH), predicting continued strong growth and margin expansion for the functional energy drink company.The firm believes the market is currently undervaluing Celsius’s potential for further market share gains and improved profitability.
Key Takeaways from Goldman Sachs’ Analysis
Analyst Bonnie Herzog,in a research note,highlighted Celsius’s position within the rapidly expanding better-for-you energy drink category. She noted the company’s ”impressive ability to grow and take share in a competitive industry.” Despite the stock more than doubling in value this year, Herzog believes a favorable risk/reward profile remains.
The core driver of Celsius’s momentum is its exposure to the attractive energy drink market, which Goldman Sachs expects to grow by 12% in 2024. this growth is fueled by consumers shifting preferences away from customary caffeine sources like coffee, according to Herzog’s conversations with retail contacts.
Celsius currently holds 17.3% of the U.S.energy drink market, having successfully taken share from established brands like Red Bull and monster. While acknowledging that future share gains will likely be more challenging, Herzog expressed confidence in Celsius’s ability to continue expanding its market presence, notably following its recent acquisition of Alani Nu.Celsius announced the completion of the Alani Nu acquisition on February 29, 2024.
Analyst Sentiment and Stock Performance
Shares of Celsius rose more than 2% in premarket trading following the release of Goldman Sachs’ report. Overall analyst sentiment towards Celsius is largely positive. According to data from LSEG, 16 out of 22 analysts covering the stock rate it as a “Buy” or “Strong Buy.”