A company announcement helped nudge Celsius Holding to early gains Monday, after an analyst downgrade on Friday sent CELH stock to its largest daily drop in more than two years.
The Boca Raton, Fla.-based energy drink maker released a statement detailing plans for expansion into new markets in Canada, the U.K. and Ireland. PepsiCo will handle sole distribution of the brand in Canada, according to its 2022 agreement with Celsius, the statement said. Suntory Beverage & Food Great Britain and Ireland will play that role for Celsius sales in the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man and the Republic of Ireland.
The release addressed at least some questions raised in a Bank of America downgrade on Friday. That note sent Celsius stock to its worst single day performance since Nov. 12, 2021.
Friday's research note from BofA noted the company's market share is down from its August peak and "unexpectedly declining." Now, sales growth concerns are weighing on "what would have been a favorable risk/reward profile" as Celsius had benefited from its $550 million distribution deal with Pepsi (PEP). Meanwhile, pressures from competition are complicating the growth rate recovery. BofA maintained its $65 price target on CELH stock.
CELH Stock: Basing Effort Sidelined
CELH stock fell 12.7% Friday, dropping below support at its 50-day moving average. Celsius had been working up the right side of a 19-week base. Friday's move puts a major hitch in that effort. The stock's four-day pullback dragged the midpoint of the handle below the midpoint in the left side of the base — too low to qualify as a valid handle.
The stock jumped 2.8% Monday morning, rising to the underside of its 50-day moving average. PEP stock slipped a fraction in early trade, after ending 0.8% lower on Friday.
