It’s time to buy Celsius Holdings as the firm’s energy drinks break away from industry leaders Red Bull and Monster, according to Piper Sandler. Analyst Michael Lavery initiated coverage of Celsius with an overweight rating, as well as a $110 price target, saying the stock is poised to break out with the growing popularity of the firm’s line of energy drinks. “CELH has a differentiated brand that sets it apart from competitors like Red Bull, Monster, other energy drinks, and coffee. It offers a more refreshing alternative to coffee with a strong caffeine boost but without the sugar of most energy drinks,” Lavery said to clients in a Tuesday note. “And while leading brands like Red Bull and Monster offer sugar free alternatives, CELH’s flavors are primarily fruit-forward and unique,” Lavery added. CELH YTD mountain Celsius shares YTD Celsius shares are underperforming this year, down by more than 10%. However, it hasn’t posted an annual loss in the past last years. In 2022, it rose 39% and gained 48% in 2021. The analyst’s $110 price target further underscores the buying opportunity, implying shares could jump 22% from Tuesday’s closing price. During Wednesday trading, Celsius shares added 2%. In addition, Celsius’ distribution deal with PepsiCo also boosts its outlook in the near- and long-term as it expands in the U.S. market. Pepsi took an 8.5% stake in Celsius in a $550 million deal in 2022, making it Celsius’ main distribution partner in the U.S., according to the note. “CELH is now in over 210,000 US stores, up ~20% from 3Q22, with additional upside planned in 2023. Joining the PEP system has already lifted CELH’s ACV to ~95%, and we expect a broader offering per store to drive gains going forward,” Lavery wrote. To be sure, there could be a cap to Celsius’ growing popularity. In the U.S., Celsius already expanded its market share to 8% in the first quarter of 2023, greater than 5% at the end of last year, the analyst said. That’s compared to Red Bull and Monster, which have a total combined market share of 71% to 76% over the last five years, the note read. “We expect CELH’s gains to be sticky, but it will likely hit a ceiling at some point. CELH has a ~17% share on Amazon, suggesting a level it could achieve broadly, but retail shares over 10% have been hard to sustain (besides Red Bull or MNST),” read the note. —CNBC’s Michael Bloom contributed to this report.