Wall Street opened the new week on a downbeat note, with major stock market benchmarks mostly moving lower. The Nasdaq Composite (^IXIC -1.15%) was down more than 1% at its low point Monday morning, although it rebounded to cut its losses by noon ET.
Investors have looked for ways to take advantage of rising optimism in the stock market, and a couple of growth stocks posted solid gains even on a down day for the market. Celsius Holdings (CELH -2.14%) sought to regain its upward momentum thanks to stock analysts on Wall Street, while Catalent (CTLT 0.32%) benefited from speculation that it could become the latest in a series of acquisition candidates that market participants have seen in recent months.
Celsius gets a lift
Shares of Celsius Holdings were up 8% around midday. The maker of energy drinks got words of encouragement from Wall Street professionals who have been following the stock for a while.
Analysts at Wedbush upgraded Celsius Holdings from neutral to outperform. They also boosted their price target on the stock by $20 per share, setting a new target of $115.
The bullish thesis for Celsius has to do with the stock's recent pullback, in Wedbush's view. The stock climbed above $120 briefly in December, as investors have been exceedingly pleased with how quickly revenue for the beverage specialist has grown. Sales more than doubled in 2021, and it appears to be quite possible that year-over-year revenue will at least come close to doubling again when final year-end 2022 figures are available. Wedbush believes that the subsequent drop below $100 per share gives would-be Celsius investors a great chance to invest at a discount.
It has surprised some shareholders that Celsius hasn't performed better to start 2023. But bargain-seeking investors could have Celsius in their sights. If consumers continue to have confidence that the company's beverages actually help them reach their fitness goals, then Celsius could make up its modest losses quickly and climb to new heights in 2023 and beyond.
Catalent gets attention from takeover speculation
Shares of Catalent posted even bigger gains, soaring more than 20% early Monday. The contract manufacturer for the life sciences industry could find itself with a would-be buyer, if reports are correct.
Industry peer Danaher (DHR -0.40%) could be looking at taking over Catalent, according to Bloomberg. The report cites sources who claim that Danaher and Catalent have been involved in discussions in recent months, although no deal is reportedly imminent, and it's entirely possible that nothing will come of the matter.
For its part, Catalent is expected to report quarterly financial results later this week, and investors are bracing for tougher times. Most of those following the contract manufacturing services provider expect a drop in sales and profits, with consensus forecasts projecting about an 8% top-line drop and earnings declines exceeding 20% year over year.
Catalent stock took a massive tumble in early November, with its quarterly results showing similarly tough conditions in its industry. Shareholders seemed spooked by reduced guidance and signs of short-term weakness back then. Yet it might turn out that the drop in the stock price could be a contributing factor for Danaher or another potential acquirer to move forward with efforts to promote consolidation in the healthcare space. Shareholders will have to wait and see, but they're optimistic about it right now.
