Key Takeaways
- Texas Attorney General Ken Paxton initiated an inquiry into Celsius Holdings regarding Alani Nu marketing tactics potentially aimed at younger consumers
- Shares of CELH declined over 6%, approaching the 52-week bottom at $27.66
- Bank of America Securities maintained its Buy recommendation with a $55 target despite regulatory concerns
- Morgan Stanley elevated CELH to Overweight from Equal Weight, establishing a $55 price objective
- Alani Nu brand revenue surged 51% in the most recent two-week measurement; flagship Celsius brand revenues declined 3.6%
Celsius Holdings experienced a turbulent trading session on Thursday. Shares plunged more than 6% following Texas Attorney General Ken Paxton’s announcement of a state inquiry into Alani Nu’s promotional strategies, pushing CELH down to $27.72 — barely above its annual low of $27.66.
Paxton’s investigation centers on allegations that Alani Nu employs vibrant packaging, whimsical design features, and youth-focused branding that could resonate with minors and adolescents. Every Alani Nu can delivers roughly 200 milligrams of caffeine. State officials will examine whether the company engaged in deceptive practices under Texas’s Deceptive Trade Practices Act.
Despite this development, BofA Securities analyst Peter Galbo remained steadfast. His team maintained its Buy recommendation and $55 valuation on CELH, leaving its perspective unchanged.
The equity has declined approximately 30% during the past half-year. According to InvestingPro’s evaluation, the shares appear attractively priced at present levels, considering the company’s $7.09 billion valuation.
Morgan Stanley Raises Rating to Overweight
The Texas investigation wasn’t the sole development. Morgan Stanley elevated CELH to Overweight from Equal Weight on Thursday, likewise establishing a $55 valuation. Analyst Eric Serotta highlighted a compelling risk-reward dynamic at present price levels.
Serotta observed that aggregate Celsius portfolio revenues — encompassing the Celsius, Alani Nu, and Rockstar labels — expanded 13.4% during the two weeks concluded May 16, 2026, closely matching the 13.7% expansion recorded in the previous measurement period.
The flagship Celsius brand is experiencing some weakness, with revenues declining 3.6% in the latest interval versus a 2.3% contraction previously. Market share for the consolidated entity decreased 30 basis points to 18.9%.
Alani Nu is generating the positive momentum. Revenue expansion accelerated to 51% in the most recent two-week timeframe, climbing from 49% the preceding period. The latest seven-day span registered 55% growth as the brand completed its lap of a Costco promotional campaign.
Morgan Stanley anticipates scanner metrics to remain volatile near-term owing to more challenging year-over-year comparisons. The investment bank projects flagship Celsius growth should strengthen during summer months with enhanced retail presence and improved velocity metrics.
First Quarter 2026 Performance Exceeds Projections
Celsius delivered robust first-quarter 2026 financial results. Earnings per share reached $0.41, substantially surpassing the $0.30 Wall Street estimate. Revenue totaled $783 million, exceeding the $763 million projection.
UBS similarly preserved a Buy stance with a $55 valuation, highlighting ongoing expansion in household penetration metrics and purchase frequency. The firm observed broad demographic appeal, even as the brand reaches maturity.
The Pepsi distribution arrangement, now approaching four years, continues to anchor retail availability throughout the product portfolio.
A recently introduced Celsius limited-edition flavor, Electric Vibe, captured approximately 30 basis points of category market share, although distribution footprint remains constrained.
Congressional examination of caffeine levels in energy beverages is not unprecedented. The sector has thus far sidestepped comprehensive regulatory intervention, though the Texas inquiry introduces an additional compliance challenge specifically for Celsius.
CELH was changing hands at $27.72 when Morgan Stanley issued its upgrade, near its annual trough.
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