Morgan Stanley upgrades outperforming energy drink stock, calls for a 20% gain

Morgan Stanley Sees 20% Upside in Leading Energy Drink Stock, Citing Strong Performance for Investors

Investing in companies is a lot like picking players for your sports team—when a player starts getting better and stronger, you want them on your side. That’s what’s happening with Celsius, an energy drink company that’s catching a lot of attention right now.

Why Investors Should Care

If you own stocks or are thinking about investing, news about Celsius matters. The company’s products are showing signs of stronger growth, which could mean the stock price goes up. When a company in a hot sector like energy drinks gets an upgrade from a big bank, it can affect your portfolio and even the wider market.

Bullish Case: Why Some Think Celsius Can Keep Climbing

  • Growth Is Speeding Up: Morgan Stanley, a major bank, just raised its price target for Celsius to $70 per share. That’s about 23% higher than where it was on Monday.
  • New Products Help: Celsius recently bought Alani Nu, another beverage brand. Even though Alani’s sales slowed down a bit, they’re expected to pick up speed soon, especially as they join a bigger distribution system.
  • Competitors Raising Prices: Monster Beverage, a rival, is making its drinks more expensive. That could drive more customers to Celsius.
  • Wall Street Likes It: Out of 23 analysts following Celsius, 17 say it’s a buy or strong buy, according to LSEG.
  • Big Rally: Celsius shares have jumped 116% so far this year. That’s a huge gain compared to most stocks.

Bearish Case: Reasons to Be Cautious

  • Recent Slowdown: Last year, Celsius’s original drinks slowed down a lot. Even though growth is back, it’s still something to watch.
  • Alani Nu’s Sales: The new brand isn’t selling as fast as it did right after Celsius bought it. There’s no guarantee those sales will bounce back quickly.
  • High Expectations: After such a big run-up, the stock could fall if Celsius doesn’t keep beating expectations.
  • Competition Is Tough: The energy drink world is crowded, with big names like Monster and Red Bull fighting for shelf space.
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Looking at the Big Picture

Energy drinks are a fast-growing market. In fact, global energy drink sales hit nearly $86 billion in 2023, according to Statista. That’s a big jump from just a few years ago. Companies that can stand out—by offering new flavors, healthy options, or strong marketing—often see their stocks rise quickly. But with high growth comes high risk, and prices can swing both ways.

Investor Takeaway

  • Watch for Growth Updates: Keep an eye on Celsius’s sales numbers, especially for its new products. Fast growth could push the stock higher, but any slowdown might hurt it.
  • Compare With Competitors: Look at what Monster and Red Bull are doing. If they stumble, Celsius might benefit—but competition could also heat up.
  • Don’t Chase Big Gains: The stock has already doubled this year. It’s tempting to jump in, but make sure you understand the risks.
  • Diversify Your Portfolio: Don’t put all your money in one stock or sector, even if it looks exciting. Spread your investments out to lower your risk.
  • Stay Informed: Read updates from trusted sources and check how analysts feel about the company before making big moves.

For the full original report, see CNBC

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