Celsius Holdings Inc (NASDAQ: CELH) shares fell 5.22% to $33.38 in premarket trading on Thursday, extending losses to a 2.49% drop to $32.17 on Friday afternoon following a downgrade by Deutsche Bank.

Analyst Downgrade Triggers Selling Pressure

Deutsche Bank lowered its rating on Celsius from Buy to Hold, maintaining a $35 price target. The bank cited lingering execution headwinds after the company’s second-quarter earnings report on Aug. 6, noting that investor expectations were rising faster than tangible evidence of a turnaround.

Crucially, the firm highlighted that management has pushed the timeline for a meaningful sales improvement out to fiscal 2027. This extends concerns from previous downgrades by Bernstein and Maxim following soft second-quarter results earlier in the month.

The downgrade interrupts a recent rally driven by institutional interest and leadership changes. Regulatory filings on Aug. 13 revealed that Ranger Investment Management L.P. acquired a new stake of 465,470 shares. Additionally, management restructuring announced on Aug. 10 promoted Tyler Bohannon to Chief Commercial Officer and created a dedicated Chief Business Transformation Officer role for Tony Guilfoyle, alongside the departure of President and COO Eric Hanson.

Core Brand Weakness vs Acquired Growth

Despite contributions from newly integrated brands Alani Nu ($364.4 million) and Rockstar Energy ($66.5 million), investor caution remains focused on the trajectory of the core brand. The combined revenue from Alani Nu and Rockstar Energy totaled $430.9 million, representing approximately 52.7% of total Q2 sales.

Celsius posted revenue of $817.9 million, missing Wall Street expectations of $870 million. Its flagship Celsius brand saw an 11.7% year-over-year sales decline, while margins fell short of expectations.

Management Commentary Highlights Long-Term Strategy

Chairman and Chief Executive Officer John Fieldly outlined the company’s efforts to streamline its core assortment while expanding its broader beverage platform during the second-quarter earnings call.

"During the second quarter of 2026, we made meaningful progress in advancing Celsius Holdings as a scaled portfolio of leading brands," Fieldly said. "We delivered a double-digit increase in second quarter revenue, completed the Rockstar integration, and maintained gross margin near first-quarter levels despite a challenging commodity environment... As it relates to our optimization project, we remain focused on improving assortment productivity and strengthening execution to return brand Celsius to sustainable growth."

What the Numbers Show

The divergence between core brand performance and acquired brand growth is stark. While total revenue reached $817.9 million, the reliance on Alani Nu and Rockstar Energy for over half of total sales underscores a strategic shift away from the flagship Celsius brand, which contracted by 11.7%. This structural change highlights the company's dependence on acquisitions to offset domestic brand weakness, with Deutsche Bank noting that core business trends weakened through the second quarter.

Celsius Holdings has entered an exclusive national partnership with SoulCycle, becoming the indoor cycling brand’s sole energy category partner. The collaboration integrates Celsius beverages into SoulCycle’s studio ecosystem across the United States.

The agreement positions Celsius products for sale at SoulCycle studios nationwide. This marks a strategic expansion for Celsius into the premium fitness retail space, leveraging SoulCycle’s network of over 60 studios in the US and London.

Partnership Structure

The collaboration extends beyond product placement to include integrated brand experiences. Key components of the deal include:

• Exclusive rights for Celsius to sell energy drinks at all SoulCycle studios.
• Dedicated themed rides and classes featuring Celsius branding.
• At-home ride experiences available through SoulCycle’s digital platform.
• Year-round activations including seasonal programming and instructor-led content.

Launch Activations

The partnership launched with a featured ride on August 22 at SoulCycle’s Barn studio in Bridgehampton, New York. The event was led by lifestyle creator Tinx and inspired by Celsius’ Spritz Vibe Summer Edition and Sparkling Limoncello Twist flavors.

A broader coast-to-coast celebration follows on August 29, featuring 20 dedicated rides across four major markets: New York, Chicago, Miami, and Los Angeles. These events aim to engage the core communities of both brands through movement and music.

Strategic Alignment

Katie Turoff, Vice President of Brand Marketing at Celsius, stated that the partnership aligns with the brand’s “Live. Fit. Go.” mantra, noting that both companies are rooted in movement and community energy.

Doug Leonard, Vice President of Partnerships and Strategic Initiatives at SoulCycle, emphasized the shared standards between the two brands. He noted that riders seek high-energy environments, making Celsius a natural fit for the studio experience.

What the Numbers Show

SoulCycle operates over 60 studios in the United States and London. By securing exclusive rights across this entire network, Celsius gains immediate access to a concentrated, high-income demographic without incremental marketing spend per location. This exclusivity creates a barrier to entry for competing energy brands within this specific fitness vertical.