What Happened?

Shares of energy drink company Celsius (NASDAQ: CELH) jumped 8.9% in the afternoon session after Truist analysts upgraded the stock's rating from Hold to Buy and raised the price target from $35 to $45. The analysts added, "In our opinion, the market is already looking past the hiccups of the legacy business in 2024 and the brand's slowdown in 1Q25."

The shares closed the day at $35.61, up 5.8% from previous close.

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What The Market Is Telling Us

Celsius’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 12 days ago when the stock gained 5.7% on the news that stocks rebounded to start the session amid continued market volatility and moved slightly higher after the Federal Open Market Committee kept rates at 4.25% to 4.50% in its March 2025 meeting. The Jerome Powell-led committee also hinted at two more rate cuts for the year, saying, "Uncertainty around the economy has grown." 

The good news was that holding rates steady and signaling two additional cuts this year meant no surprises (the market dislikes surprises). The bad news was that the Fed reduced its outlook for growth to 1.7%, down from the previous projection of 2.1% in December. At the same time, the inflation outlook was raised to a 2.8% annual increase for core prices, up from the prior projection of 2.5%. This suggested the Fed saw the macro tilting towards a stagflation scenario, where inflation rises as economic growth slows.

Celsius is up 30.7% since the beginning of the year, but at $35.56 per share, it is still trading 63% below its 52-week high of $96.09 from May 2024. Investors who bought $1,000 worth of Celsius’s shares 5 years ago would now be looking at an investment worth $25,340.

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