Key Takeaways
- Texas Attorney General Ken Paxton initiated an inquiry into Celsius Holdings regarding Alani Nu’s marketing strategies that may target younger consumers
- Shares of CELH declined over 6%, hovering close to the 52-week low of $27.66
- BofA Securities maintained its Buy recommendation with a $55 target price following the investigation announcement
- Morgan Stanley elevated CELH from Equal Weight to Overweight, also assigning a $55 price objective
- The Alani Nu energy drink line posted 51% sales growth during the most recent two-week measurement period, while core Celsius brand sales contracted 3.6%
Celsius Holdings experienced a turbulent trading session Thursday. Shares plummeted more than 6% following Texas Attorney General Ken Paxton’s announcement of a state-level inquiry into marketing practices associated with the Alani Nu product line, pushing CELH down to $27.72ânarrowly above the yearly floor of $27.66.
According to Paxton’s office, Alani Nu employs vibrant packaging designs, whimsical visual elements, and marketing themes that could specifically attract minors and adolescents. Every Alani Nu can delivers roughly 200 milligrams of caffeine. The probe will examine potential violations of the Texas Deceptive Trade Practices Act regarding consumer disclosures.
In response to the development, BofA Securities analyst Peter Galbo stood by his position. The firm maintained its Buy recommendation and $55 valuation target on CELH without adjustment.
Shares have declined approximately 30% during the preceding six-month stretch. According to InvestingPro’s valuation models, the stock appears discounted at present levels, considering the company’s market capitalization of $7.09 billion.
Morgan Stanley Raises Rating to Overweight
The Texas regulatory development wasn’t the only significant development. Morgan Stanley elevated CELH from Equal Weight to Overweight on Thursday, establishing a $55 price objective. Analyst Eric Serotta highlighted favorable risk-reward dynamics at prevailing valuations.
Serotta observed that combined Celsius portfolio salesâencompassing the Celsius, Alani Nu, and Rockstar product linesâexpanded 13.4% during the two-week span concluding May 16, 2026, essentially matching the 13.7% expansion recorded in the preceding measurement window.
The flagship Celsius brand exhibits some weakness, posting a 3.6% sales decline in the current period versus a 2.3% contraction previously. Market share for the consolidated portfolio slipped 30 basis points to 18.9%.
Alani Nu continues driving performance. Revenue growth accelerated to 51% in the latest two-week interval, climbing from 49% in the prior reading. The final week registered 55% expansion as the brand completed comparisons against a Costco promotional cycle.
Morgan Stanley anticipates near-term volatility in scanner metrics due to more challenging year-over-year benchmarks. The investment bank projects core Celsius brand acceleration during summer months supported by enhanced retail positioning and improved turnover rates.
First Quarter 2026 Performance Surpasses Projections
Celsius delivered robust first-quarter 2026 figures. Earnings per share reached $0.41, significantly exceeding the $0.30 Street consensus. Total revenue achieved $783 million, surpassing the $763 million analyst estimate.
UBS similarly preserved a Buy stance with a $55 valuation target, citing ongoing expansion in household reach and purchase frequency. The firm highlighted broad demographic appeal despite brand maturation.
The distribution agreement with Pepsi, now approaching its fourth anniversary, continues supporting retail availability throughout the product portfolio.
A recently launched limited-edition Celsius variant, Electric Vibe, captured approximately 30 basis points of category market share, although retail coverage remains constrained.
Legislative scrutiny surrounding caffeine levels in energy beverages isn’t unprecedented. The sector has thus far evaded comprehensive regulatory intervention, though the Texas investigation introduces renewed pressure specifically on Celsius.
CELH was quoted at $27.72 when Morgan Stanley published its upgrade, positioned near the 52-week minimum.
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