Celsius (CELH) continued to see deceleration in its core business, largely in line with management's expectations, as the company progresses through stock keeping unit rationalization and gains incremental shelf space, UBS Securities said in a note Tuesday.
Traditional Fruit Flavors continue to hold steady and remain the only growing product line in the Core Celsius portfolio, while Essentials continues to weigh on performance and worsen sequentially and Vibe has slowed across the board.
UBS said the company's top 10 stock keeping units continued to outperform the broader portfolio despite the slower near-term trends. The risk-reward remains skewed to the upside and sees a credible path to organic revenue growth and double-digit earnings-per-share growth by 2027.
The investment firm trimmed its Q2 earnings per share estimate to $0.37 from $0.38, while keeping its full-year EPS estimate unchanged at $1.44. Core Celsius Q2 sales are expected to decline 4%. Alani Nu sales are projected to rise 27%, according to the note.
UBS kept a buy rating on Celsius and lowered the price target to $50 from $55.
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