Celsius Holdings (CELH) remains in focus after Texas Attorney General Ken Paxton launched an investigation into the company for marketing Alani Nu to teenagers and children.
Alani Nu is a low-calorie energy drink containing 200 mg of caffeine per 12-ounce can, a level medical professionals consider dangerous for children and adolescents.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
The Texas AG probe arrives at a time when Celsius shares are already grappling with a significant selloff, currently down about 95% versus their year-to-date high in late January.
www.barchart.comWhat the Texas AG Probe Means for Celsius Stock
Paxton’s investigation follows a lawsuit from the family of a 17-year-old Texas cheerleader who allegedly died from a heart condition linked to excessive caffeine consumption.
His office is examining potential violations of the Deceptive Trade Practices Act after the family claimed the product lacked sufficient warnings.
Celsius Holdings responded by saying it “disagrees with the allegations and characterizations” in Paxton’s announcement but expects to cooperate with the review.
For those invested in CELH stock, this probe introduces meaningful regulatory overhang that may affect marketing spend, compliance costs, and broader positioning of the Alani Nu brand, which Celsius acquired last year and has leaned on heavily for growth.
Should You Load Up on CELH Shares Today?
Despite the regulatory overhang, however, Bank of America remains largely unfazed, with analysts led by Peter Galbo maintaining their “Buy” rating on Celsius shares.
According to him, energy drink makers have periodically drawn regulatory scrutiny without lasting damage. Galbo currently has a $55 price target on CELH, indicating potential for just under 100% rally from here.
In its research note, BofA also cited an attractive valuation for its positive view, given that Celsius Holding is hovering around its 52-week low at the time of writing.
Even from a fundamental perspective, the company beat Q1 earnings expectations by 37%, posting $0.41 in earnings per share (EPS) against a $0.30 per-share consensus.
What’s the Consensus Rating on Celsius Holdings?
Note that BofA is among the more conservative Wall Street firms on Celsius Holdings.
The consensus rating on CELH shares sits at “Strong Buy,” with the mean price target of an even higher $64.11, suggesting they could more than double from here over the next 12 months.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Dear Micron Stock Fans, Mark Your Calendars for June 24 TTM Technologies Stock Is Up 450% in a Year and Could Still Run Higher Intel Just Landed a Major Foxconn AI Win. INTC Stock Needs Proof, Not Hope, to Climb Further. CELH Stock Alert: What to Know as Celsius Faces Child Safety Investigation