CELH stock plummeted near a key technical moving average Tuesday after Morgan Stanley put out a cautious note regarding the latest sales trend data for energy drink maker Celsius.
Morgan Stanley analyst Dara Mohsenian in a Tuesday research note warned that sales growth for Celsius Holdings appears to be slowing based on the latest Nielsen retail trend data, Seeking Alpha reported. The firm noted that Celsius sales growth slowed sequentially to a 39% clip for the week ending May 18. The energy drink maker's market share also dipped to 10.5% for the week from 10.8% from the week prior.
Meanwhile, Celsius' pricing for the period was down 7.2% year over year.
Although Morgan Stanley is cautious in the near term, the firm sees a robust U.S. runway for Celsius based on increasing items per store, improving placements in cooler locations, and growth in nontracked retail channels. However, sales comparisons will be difficult over the next several quarters as velocity growth from its distribution agreement with PepsiCo begins to taper. It could potentially cool sentiment, Morgan Stanley warned.
Stifel on Tuesday also wrote that Celsius sales in Q2 could be impacted by the Pepsi system adjusting the amount of Celsius inventory it holds, The Fly reported. The firm reduced its Q2 sales estimates to reflect expected inventory reductions.
But Stifel raised its price target on CELH stock to 95 from 85 based on increased confidence that Celsius can maintain its market-share gains. The firm also believes that demand is healthy after hosting meetings with Celsius CEO John Fieldly and Chief of Staff Toby David. Stifel maintained a buy rating on CELH stock.
CELH Stock
CELH stock dived nearly 13% Tuesday, briefly undercutting its 50-day moving average in the morning. Volume was unusually high, up more than 410% from the daily average, MarketSurge charts show. The move marked Celsius' largest single-day decline since May 9, 2022, when shares fell about 17.4%.
Prior to Tuesday's drop, CELH stock was working on a cup base with a 99.62 buy point, which matched its record high from March 14. Technically, Celsius could soon have a handle, but it would be unsightly.
Still, CELH stock has rallied about 52% in 2024.
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