Key facts
- Texas AG Ken Paxton is investigating Celsius Holdings' Alani Nu brand marketing.
- The probe alleges Alani Nu's branding may appeal to teenagers and children.
- CELH stock fell over 6% following the announcement.
- BofA Securities reiterated a Buy rating and $55 price target for CELH.
- Morgan Stanley upgraded CELH to Overweight with a $55 price target.
Texas Attorney General Ken Paxton has initiated an investigation into Celsius Holdings concerning the marketing practices of its Alani Nu brand. The probe alleges that Alani Nu's packaging and branding may appeal to teenagers and children, potentially violating the Texas Deceptive Trade Practices Act. Each can of Alani Nu contains approximately 200 milligrams of caffeine. The announcement caused Celsius Holdings' stock (CELH) to drop by more than 6%, trading near its 52-week low. Despite the investigation, BofA Securities reiterated its Buy rating and $55 price target for CELH. Concurrently, Morgan Stanley upgraded CELH to Overweight from Equal Weight, also setting a $55 price target, citing an attractive risk-reward profile. While brand Celsius sales have shown softness, Alani Nu sales growth accelerated to 51% in the latest two-week period. Celsius reported strong Q1 2026 earnings, with EPS of $0.41 and revenue of $783 million, exceeding consensus estimates. The company's partnership with Pepsi continues to support its distribution.