Key Highlights
- Ken Paxton, Texas Attorney General, initiated an inquiry into Celsius Holdings regarding Alani Nu marketing strategies potentially aimed at minors
- 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 despite regulatory scrutiny
- Morgan Stanley elevated CELH from Equal Weight to Overweight, establishing a $55 price objective
- Alani Nu energy drink revenue surged 51% in the most recent two-week measurement; flagship Celsius brand declined 3.6%
Celsius Holdings experienced a tumultuous trading session Thursday. Shares plummeted more than 6% following Texas Attorney General Ken Paxton’s announcement of a state-level probe into Alani Nu’s promotional tactics, pushing CELH down to $27.72 — barely above its annual bottom of $27.66.
Paxton’s department contends that Alani Nu employs vibrant packaging, whimsical graphic elements, and youth-focused branding strategies that could resonate with adolescents and minors. Every Alani Nu can delivers around 200 milligrams of caffeine. The probe will examine potential violations of the Texas Deceptive Trade Practices Act regarding consumer transparency.
Despite regulatory headwinds, BofA Securities analyst Peter Galbo remained unwavering. The institution reaffirmed its Buy stance and maintained the $55 price objective on CELH without adjustment.
The equity has declined approximately 30% across the previous six-month period. InvestingPro’s evaluation indicates the shares appear attractively priced at present valuations, considering the enterprise’s $7.09 billion market capitalization.
Morgan Stanley Raises Rating to Overweight
The regulatory announcement wasn’t the sole market-moving development. Morgan Stanley lifted CELH to Overweight from Equal Weight Thursday, also establishing a $55 valuation target. Analyst Eric Serotta highlighted a compelling risk-reward opportunity at prevailing price levels.
Serotta observed that combined Celsius portfolio revenues — encompassing the Celsius, Alani Nu, and Rockstar labels — expanded 13.4% during the two-week interval concluding May 16, 2026, closely aligned with the preceding period’s 13.7% advance.
The flagship Celsius brand demonstrates some weakness, with revenues declining 3.6% in the recent measurement versus a 2.3% contraction previously. Dollar market share for the consolidated company slipped 30 basis points to 18.9%.
Alani Nu is driving performance. Revenue expansion accelerated to 51% in the latest two-week measurement, climbing from 49% the previous period. The final week recorded 55% growth as the label completed a Costco promotional cycle.
Morgan Stanley anticipates scanner metrics will remain volatile near term amid more challenging year-over-year comparisons. The firm projects flagship Celsius expansion should strengthen during summer months with broadened retail placement and improved turnover rates.
Q1 2026 Financial Performance Exceeded Projections
Celsius delivered robust Q1 2026 financial metrics. Earnings per share registered $0.41, significantly surpassing the $0.30 analyst consensus. Revenue reached $783 million, exceeding the $763 million projection.
UBS likewise preserved a Buy recommendation with a $55 valuation target, highlighting sustained expansion in household adoption and purchase frequency. The firm acknowledged appeal across diverse demographic segments, even as the brand achieves greater market maturity.
The Pepsi collaboration, now approaching four years, continues supporting distribution infrastructure throughout the product portfolio.
A recent Celsius limited-edition release, Electric Vibe, captured approximately 30 basis points of category market share, though retail availability remains constrained.
Congressional examination of caffeine levels in energy beverages is an established pattern. The sector has successfully navigated widespread regulatory intervention thus far, although the Texas investigation introduces additional compliance challenges for Celsius particularly.
CELH was exchanging hands at $27.72 when Morgan Stanley announced the upgrade, positioned near its annual low watermark.
