What Happened?
Shares of energy drink company Celsius (NASDAQ: CELH) fell 5.9% in the afternoon session after Deutsche Bank analyst Steve Powers downgraded the stock from Buy to Hold with a price target of $35.00, according to TipRanks.
Deutsche Bank had moved the energy-drink maker to Buy in March after a sharp selloff, arguing the franchise was oversold, as reported by TipRanks. The same TipRanks summary of the note says that view no longer holds: core Celsius trends weakened through the second quarter, results missed, and management has pushed a meaningful recovery to fiscal 2027. Powers does not expect proof of a durable turn in the core brand before calendar 2027. A Hold with a $35 target, near recent trading levels, leaves little room for multiple expansion until that recovery shows up in the numbers.
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What Is The Market Telling Us
Celsius’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 18% on the news that the company reported second-quarter 2026 financial results that missed Wall Street expectations for both revenue and earnings per share. The company posted revenue of $817.9 million, which, despite representing 10.6% year-over-year growth, fell short of the $872 million analysts had anticipated. Adjusted earnings per share came in at $0.36, below the consensus estimate of $0.42. Profitability was a significant concern for investors as the company's operating margin compressed to 9.2% from 19.3% in the same quarter last year. The sharp decline in profitability suggested rising costs and an inability to pass them on to customers, a key factor in the negative market reaction.
Celsius is down 30.9% since the beginning of the year, and at $32.99 per share, it is trading 49.1% below its 52-week high of $64.86 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Celsius’s shares 5 years ago would now be looking at an investment worth $1,310.
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