Citi has initiated coverage on Celsius Holdings (CELH), signaling optimism around the energy drink maker’s growth prospects in both the near and long term.
Analyst Filippo Falorni assigned a buy rating to Celsius stock and set a price target of $55, representing a potential 24% upside from Tuesday’s closing price.
The move reflects growing confidence on Wall Street in the continued momentum of the energy drink category and Celsius’s position within it, even after a strong rally this year.
Long-term growth potential backing current valuation
Despite Celsius stock gaining approximately 68% year-to-date, Falorni argued the rally is far from over.
He believes the company’s long-term growth potential supports its current valuation, pushing back against concerns that the stock has limited room to grow.
In his Wednesday note to clients, Falorni emphasized Celsius’s ability to continue capturing market share, particularly with the recent acquisition of Alani Nu, which adds a second brand under its umbrella.
Celsius’s distribution footprint, when compared with competitors such as Monster and Red Bull, remains relatively limited.
This gap, according to Falorni, opens the door for meaningful expansion opportunities.
He noted that both Celsius and Alani Nu are under-distributed compared to category leaders, suggesting further room to grow in the US market.
Favorable consumer trends driving category growth
Citi’s optimism is rooted in broader consumer and category trends that have favored energy drinks in recent years.
Falorni noted that the US energy drink market is reaccelerating, a tailwind that could benefit Celsius significantly.
The analyst highlighted changing consumer preferences, particularly among younger demographics, that align well with Celsius’s value proposition, which includes zero sugar, fitness-focused branding, and broader appeal to female consumers.
Falorni also drew comparisons to Monster Beverage Corporation (MNST), another name Citi rates a buy.
He believes Celsius can follow a similar trajectory, leveraging consumer trends and brand strength to grow its presence both domestically and eventually abroad.
International expansion key to long-term strategy
Looking beyond the US market, Falorni identified international expansion as a significant growth lever for Celsius.
He referenced Monster’s growth story in the early 2010s as a model that Celsius could replicate.
Although Celsius’s current international presence is limited, the analyst believes the company has the potential to scale globally in the coming years, contributing to sustainable topline growth.
Wall Street sentiment on Celsius remains largely positive, although slightly more reserved compared to Citi.
According to LSEG data, the consensus price target suggests about 8% upside, with 21 analysts covering the stock.
Of those, five rate it a strong buy, 10 a buy, and four a hold.
With a solid foundation in consumer trends, product positioning, and potential for expansion, Celsius appears well-positioned to sustain its momentum, provided it executes effectively on its distribution and international strategies.
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