Bernstein Highlights Energy‑Drink Leaders in CPG
Bernstein analyst Cristian Rios notes that consumer packaged goods (CPG) companies are facing cyclical pressure rather than a structural decline, and he identifies energy drinks as the brightest growth opportunity within the sector. The analyst points to a broader shift toward functional food and beverages that support specific goals such as weight loss, sports performance and mental focus, with energy drinks benefitting especially from the rising use of GLP‑1 medications.
Top Picks and Ratings
1. Celsius Holdings (CELH) – Rated Outperform with a price target of $44. Bernstein believes Celsius owns the most promising energy‑drink brand, Alani Nu, and that market‑share concerns are overstated. The firm expects strong repurchase rates and additional brand‑awareness headroom to sustain U.S. share, with margin expansion driven by continued sales growth. Forecasts are 16% and 28% year‑over‑year EPS growth, implying a total upside of 55%.
2. Keurig Dr. Pepper (KDP) – Rated Outperform with a price target of $38. The company’s functional‑beverage portfolio, including hot energy and hydration brands, is viewed as solid despite a challenging integration phase. Bernstein projects EPS growth of 17% and 8% YoY, giving a total upside of 22%.
3. Coca‑Cola (KO) – Rated Market‑Perform with a price target of $84. Described as a high‑quality compounder, Coca‑Cola’s strength lies in functional beverages such as protein‑enhanced and zero‑calorie drinks, with global demand for zero‑calorie cola accelerating. EPS growth is forecast at 6% and 7% YoY, translating to a modest upside of 4%.
4. PepsiCo (PEP) – Rated Market‑Perform with a price target of $143. The firm faces headwinds in its snacks segment and is losing share in North‑American beverage sub‑categories, but its international business remains healthy. Bernstein expects 3% YoY EPS growth and anticipates a flat stock‑price outlook.
5. Monster Beverage Corp (MNST) – Rated Market‑Perform with a price target of $95. Monster benefits from the strongest international energy‑drink business, leveraging Coca‑Cola’s distribution network. EPS growth forecasts are 12% and 14% YoY, with a total upside of 5%.
6. Estee Lauder (EL) – Rated Market‑Perform with a price target of $82. After a period of decline, the company has returned to growth, though structural challenges such as the decline of department‑store channels limit further acceleration. EPS is projected to rise 36% and 13% YoY, but the stock carries a 5% downside expectation.
7. e.l.f Beauty (ELF) – Rated Market‑Perform with a price target of $60. The firm’s social‑media‑savvy operating model and rapid innovation are seen as well‑aligned with today’s consumer, yet EPS has been volatile following a large acquisition and heightened investment. Forecasts show 2% and 7% YoY EPS growth, with a total upside of 7%.
8. Procter & Gamble (PG) – Rated Market‑Perform with a price target of $156. The diversified portfolio is described as difficult to accelerate or disrupt; beauty‑segment strength offsets private‑label pressure in commoditized categories. Bernstein expects EPS growth of 1% and 5% YoY, with a 5% upside potential.
9. Colgate‑Palmolive (CL) – Rated Market‑Perform with a price target of $96. The company is noted for having the most productive geographic footprint in Bernstein’s coverage, with strong household and personal‑care brands internationally and a growing global pet‑care business. EPS growth forecasts are 4% and 9% YoY, implying a total upside of 9%.
Sector Outlook
Bernstein concludes that while household and personal‑care products face a lower growth baseline due to private‑label competition and channel disruption, the broader beverage category is positioned for growth. Energy drinks, as a subset of functional beverages, are expected to lead the sector’s recovery, supported by consumer interest in health‑focused products and the ancillary boost from GLP‑1 medication usage.
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