Analyst Downgrade Fuels Further Decline for Celsius (CELH) Shares Amid Sales Concerns and Investor Lawsuit- Hagens Berman

Company Performance and Challenges - Celsius Holdings (CELH) shares have declined by 58 percent year-to-date, facing renewed pressure after a key analyst lowered its price target due to concerns about sales and the impact of its distribution agreement with PepsiCo [1] - The company's stock dropped more than 11 percent on September 4, 2024, following a presentation revealing a $100 million to $120 million shortfall in PepsiCo orders compared to the previous year [8] - On May 28, 2024, Celsius shares fell nearly 13 percent after Nielsen data indicated a slowdown in sales growth, with analysts raising concerns about a significant sales contraction as PepsiCo reduced inventory levels [5] Financial and Operational Issues - Celsius is accused of failing to disclose critical issues, including excessive inventory shipped to PepsiCo beyond actual consumer demand, a projected decline in sales, and overstated business metrics and financial forecasts [2] - The revised distribution agreement with PepsiCo is expected to have a greater-than-expected negative impact on fourth-quarter revenue, according to Roth MKM analysts [4] - PepsiCo carried several million excess cases of Celsius products over the past 18 months, contributing to the company's financial challenges [8] Legal and Regulatory Actions - A securities class-action lawsuit alleges that Celsius misled investors about its operations and prospects, prompting an investigation by Hagens Berman [7] - Hagens Berman is investigating whether Celsius deliberately concealed the extent of its inventory buildup at PepsiCo [3] - The class period for the lawsuit is from February 29, 2024, to September 4, 2024, with a lead plaintiff deadline of January 21, 2025 [7] Analyst and Market Reactions - Roth MKM reduced its price target on Celsius shares to $38 from $40, citing anticipated higher promotional allowances in the fourth quarter and the negative impact of the revised distribution agreement with PepsiCo [4] - The company's diminished valuation is attributed to slowing sales, revised financial forecasts, and the shareholder lawsuit [1]