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Celsius falls after brokerages cut PT on Pepsi's inventory reduction

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** Energy drink maker Celsius Holdings' CELH.O shares fall 4.5% to $62.84

** CELH management, in a conference on Tuesday, noted an impact of $20-$30 mln on Q2 revenue due to further inventory reductions from its primary distributor Pepsico PEP.O

** Brokerage Morgan Stanley cuts PT to $68 from $75, Wedbush to $83 from $85 and Stifel to $85 from $95

** "We believe the bulk of the H1 inventory cut reflects that PEP's inventories of Celsius exiting 2023 were too high for the recent sales rate" - Morgan Stanley

** Stifel says "further meaningful reductions are unlikely" as CELH inventories held by PEP nearing equilibrium since distribution changeover in Q3 2022

** All three brokerages also note co's less-than-expected energy category growth along weakening sales trends in scanner data-tracked channels

** Six brokerages rate the stock "strong buy", eight "buy" and three "hold"; their median PT is $92.66 - LSEG data

** Stock had fallen 16% YTD

Reporting by Aatreyee Dasgupta


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