Beverage brand Celsius Holdings (NASDAQ:CELH) is not having a good day back from the Memorial Day holiday. It’s down nearly 17% in Tuesday morning’s trading, and it turns out the reason is one of the most basic of all – sales trends.
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Word from Morgan Stanley, via five-star analyst Dara Mohsenian, proved troublesome at best for the brand. The report noted that Celsius’ sales growth is on the decline, now up just 39% for the week ending May 18. Further, Celsius’ overall market share is down to 10.5% from 10.8% in the week prior. Pricing for the latest period also fell 7.2% against the same time last year.
All of this combined produced a significant negative effect on Celsius’ stock performance, which was experiencing a rally of around 85% for the year. But the latest numbers put a significant damper on that rally, and short interest is now up around 10.1% of overall float.
Potential Win Ahead?
It wasn’t all doom and gloom, though; Mohsenian’s report noted that there was a “…robust U.S. runway…” as it’s seeing growth in terms of available items per store and total number of stores available. Thus, even if Celsius starts losing ground, it may be able to make up for it with sheer availability. However, there’s one other point that may prove troublesome: its agreement with PepsiCo (NASDAQ:PEP) is starting to taper off, and losing that marketing support could prove a problem in its own right.
Is Celsius Holdings a Good Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CELH stock based on nine Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 90.9% rally in its share price over the past year, the average CELH price target of $93.82 per share implies 18.34% upside potential.
