JPMorgan (JPM, Financial) has initiated coverage of Celsius Holdings (CEHL, Financial) with an "overweight" rating and set a price target of $37. The investment bank applauded the company's improving category trends and attractive valuation, featuring the stock now at $29.76, trading far below its historical high. Price targets range from $26 to $62, suggesting lots of upside from the analyst estimates.
Yet Celsius, like the other leading brands, is not U.S. energy drink royalty. As the third biggest, it is solely propelled by its health-conscious offerings. Businesses like chocolate and confectionary businesses that favour zero sugar, functionality, and premium positioning are in line with key consumer trends in health and wellness. JPMorgan, however, expects Celsius to continue eclipsing rival energy drink brands as demand for the products continues to accelerate.
The company's financials are incredibly positive: 19.4% recurring revenue growth over the past year and very strong gross margins of close to 50%. Celsius has a strong balance sheet that surpasses debt by way of cash, additionally strengthening it as a potential consumer staples growth stock. The analysts expect the company to keep its lead and keep recording good performance.
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