Pepsi Is Doubling Down on Celsius. Should You Follow Suit and Buy CELH Stock Here?

Celsius (CELH) shares closed higher on Friday after beverage giant PepsiCo (PEP) raised its stake in the fitness and energy drinks specialist to 11%.

PepsiCo has spent some $585 million to acquire 5% of Celsius Holdings’ newly issued convertible preferred stock, the companies confirmed in their joint press release today.

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Celsius stock has been nothing short of a game-changing investment in 2025. At the time of writing it’s up nearly 200% versus its year-to-date low in February.www.barchart.com

Why the PepsiCo Announcement Is Positive for Celsius Stock

PepsiCo’s increased stake signals a deepening strategic alignment with CELH, validating the firm’s future growth potential.

The giant’s investment instantly boosts credibility and access to its U.S. and Canadian distribution could supercharge Celsius Holdings’ newly acquired wellness brand, Alani Nu.

In the near-term, the announcement amplified momentum and strengthens investor confidence that may help CELH stock rip higher from here.

Note that PepsiCo’s announcement arrives only weeks after Celsius reported blockbuster financials for its second quarter, with revenue up 84% and net income advancing over 25% on a year-over-year basis.

CELH Shares Remain Unattractive to Own at Current Levels

While the PepsiCo investment sure is constructive for Celsius shares, investors are recommended caution in initiating a new position here as they’re not inexpensive to own at current levels.

CELH stock is going for a forward price-earnings (P/E) multiple of nearly 55x at writing, well above several AI stocks, even including Nvidia (NVDA) that’s currently trading at under 45x only.

Moreover, the company’s recent quarterly release suggests its operating costs are going through the roof, driven by aggressive marketing and acquisition spend. In fact, its SG&A expensed more than doubled in Q2.

This means any slowdown in consumer demand or hiccup in distributor relationships could quickly pressure Celsius Holdings’ margins and derail momentum.

How Wall Street Recommends Playing Celsius Shares

Investors should remain wary of buying Celsius stock at current levels also because Wall Street no longer forecasts meaningful upside in it over the next 12 months.

Story Continues

While the consensus rating on CELH shares remain at “Strong Buy,” the mean target of about $59 actually indicates potential downside of roughly 5% from here.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. This article was originally published on Barchart.com

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