Sometimes, a quarter is so good it makes an analyst change their entire tune. That's what happened with Celsius Holdings (CELH) this week.
The energy drink company posted fourth-quarter results that didn't just beat Wall Street's expectations—it blew right past them. Adjusted earnings per share came in at 26 cents, well above the consensus estimate of 20 cents. Revenue was the real showstopper: $721.6 million, a staggering 117% jump from the same period last year and miles ahead of the $640.8 million analysts were looking for. Adjusted EBITDA gained 113% to $134.1 million. In short, business is booming.
For Bank of America Securities analyst Peter Galbo, those numbers were powerful enough to make him abandon his previous caution. He upgraded the stock from Underperform to Buy and, more importantly, raised his price target from $45 to $65. That's a pretty significant vote of confidence.
So, what changed? According to Galbo, the fourth-quarter beat was driven by the Alani Nu brand, which has now moved into the PepsiCo Inc. (PEP) distribution system. That shift, he says, sets up solid momentum heading into 2026. He also noted that Core Celsius North America has secured 2026 shelf-space gains of 17%, as outlined at a recent industry conference. Those gains should support strong consumer demand, helping investors look past what he calls "inventory noise" expected in the second half of 2025.
It's worth understanding why Galbo was cautious in the first place. He says his prior Underperform rating stemmed from valuation concerns and tough year-over-year comparisons, not from any doubt about the Celsius brand itself. The rating also didn't reflect a bearish view on the growth of the energy drink category overall. Now, with the stock's performance and the company's outlook, he's aligning his rating with that more positive view.
The analyst's financial estimates have moved up accordingly. He raised his fiscal 2026 adjusted EBITDA forecast to $815.9 million from $746 million, crediting stronger Alani Nu sales trends that are tracking ahead of his prior assumptions. On margins, the company reiterated its gross margin outlook in the low-50% range, with improvement expected through the year. Galbo said he's still modeling a 50.6% gross margin for fiscal 2026.
Galbo's upgrade fits into a broader theme he's watching. He said nonalcoholic beverages remain his preferred way to invest in the Consumer Staples sector this year, and he likes the growth trajectory of the energy category. With this move, his rating on Celsius now matches that optimistic view.
He also listed several other top picks in the beverage group, including The Coca-Cola Company (KO), Monster Beverage Corporation (MNST), and The Vita Coco Company, Inc. (COCO).
Of course, no investment thesis is without risks. Galbo flagged ongoing inventory swings between the Alani Nu and Celsius North America businesses as a key factor to watch. But his take is that steady consumer demand should help investors see through that short-term noise over time.
Despite the glowing analyst report, Celsius shares were down slightly on Friday, trading at $53.46. Sometimes the market takes a minute to catch up to a changed story.
