Rothschild Redburn's Neutral Rating#
Rothschild Redburn has started coverage on Celsius Holdings (NASDAQ:CELH) with a Neutral rating and has set a price target of $47.00. Currently, the stock is trading at $33.52, which is close to its 52-week low of $32.01. This indicates potential growth towards the analyst's target price. Some analyses suggest that the stock may be undervalued at its current price.
Impressive Sales Growth#
Celsius has seen remarkable growth, with net sales increasing 19 times since 2020, largely due to the popularity of its clean energy drinks in the U.S. Over the last year, the company generated $2.52 billion in revenue, and analysts expect a 34% growth rate for the current year. This growth has enabled Celsius to enter a significant partnership with PepsiCo, enhancing its distribution channels and improving product placement in stores.
Strategic Partnership with PepsiCo#
In 2025, Celsius strengthened its partnership with PepsiCo, which now holds about 11.5% of Celsius's common shares. As part of this arrangement, Celsius is required to pay a 5% dividend yield on PepsiCo’s preference shares, which will take up approximately 8% of its free cash flow in the coming years. Additionally, Celsius has taken control of the underperforming Rockstar brand in the U.S. from PepsiCo.
Market Dynamics and Future Outlook#
The amended distribution agreement with PepsiCo includes a target gross margin that will benefit PepsiCo as it increases its share of the U.S. energy drinks market. PepsiCo will also have more products to distribute following its recent acquisitions in the beverage sector. In other news, Barclays has noted that consumer goods companies are effectively managing rising costs while maintaining profit forecasts, and Deutsche Bank has upgraded Celsius Holdings to a Buy rating, citing the recent drop in stock price as an attractive buying opportunity.