Celsius Holdings (CELH) Stock Drops 6% — But Two Banks Say Buy the Dip

TLDR

• Texas AG Ken Paxton launched an investigation into Celsius Holdings over Alani Nu marketing practices allegedly targeting teens and children
• CELH stock fell more than 6%, trading near its 52-week low of $27.66
• BofA Securities held its Buy rating and $55 price target despite the probe
• Morgan Stanley upgraded CELH to Overweight from Equal Weight with a $55 price target
• Alani Nu energy drink sales grew 51% in the latest two-week period; brand Celsius sales fell 3.6%

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Celsius Holdings had a busy Thursday. The stock dropped more than 6% after Texas Attorney General Ken Paxton announced a state investigation into the Alani Nu brand’s marketing practices, sending CELH to $27.72 — just above its 52-week low of $27.66.

Celsius Holdings, Inc., CELH

Paxton’s office alleges that Alani Nu uses colorful packaging, playful design elements, and youth-oriented branding that may appeal directly to teenagers and children. Each can of Alani Nu contains approximately 200 milligrams of caffeine. The investigation will assess whether the company misled consumers under the Texas Deceptive Trade Practices Act.

Despite the news, BofA Securities analyst Peter Galbo held firm. The firm reiterated its Buy rating and $55 price target on CELH, making no change to its outlook.

The stock is now down roughly 30% over the past six months. InvestingPro analysis suggests the stock looks undervalued at current levels, given the company’s $7.09 billion market cap.

Morgan Stanley Upgrades to Overweight

The Texas news wasn’t the only headline. Morgan Stanley upgraded CELH to Overweight from Equal Weight on Thursday, also setting a $55 price target. Analyst Eric Serotta pointed to an attractive risk-reward profile at current prices.

Serotta noted that total Celsius category sales — covering the Celsius, Alani Nu, and Rockstar brands — grew 13.4% in the two weeks ended May 16, 2026, roughly in line with the 13.7% growth seen in the prior period.

Brand Celsius itself is showing some softness, with sales down 3.6% in the latest period compared to a 2.3% decline before that. Dollar share for the overall firm dipped 30 basis points to 18.9%.

Alani Nu is carrying the momentum. Sales growth accelerated to 51% in the latest two-week window, up from 49% the prior period. The most recent week hit 55% growth as the brand finished cycling a Costco promotion.

Morgan Stanley expects scanner data to stay choppy short term due to tougher comparisons. The firm believes brand Celsius growth should pick up this summer with expanded shelf space and better velocities.

Q1 2026 Results Beat Expectations

Celsius reported strong Q1 2026 numbers. EPS came in at $0.41, well above the $0.30 consensus. Revenue hit $783 million, topping the $763 million forecast.

UBS also maintained a Buy rating with a $55 price target, pointing to continued growth in household penetration and buy rate. The firm noted interest across most demographics, even as the brand matures.

The Pepsi partnership, now nearly four years old, continues to underpin distribution across the portfolio.

A new Celsius limited-time offering, Electric Vibe, reached roughly 30 basis points of category share, though distribution remains limited.

Congressional scrutiny over caffeine content in energy drinks is not new. The industry has so far avoided sweeping regulatory action, though the Texas probe adds a fresh layer of pressure on Celsius specifically.

CELH was trading at $27.72 at the time of the Morgan Stanley upgrade, near its 52-week low.