Aug. 12 at 10:24 PM
$CELH
Pepsi knows the economics far better than outside investors. In Q2,
$492M of CELH revenue came from Pepsi, demonstrating how deeply integrated the two companies now are.
Therefore, I don't think Pepsi looks at CELH as a company earning
$0.24/share and trading at 114x earnings. Pepsi can see the underlying portfolio economics, transitional costs, retail velocity and future margins.
My preferred framework is ~28x conservative Pepsi-adjusted P/E today, falling toward ~12–16x if CELH reaches
$1.75–
$2.25 of forward EPS.
That makes the key question increasingly interesting:
If Pepsi believes CELH can sustainably earn
$2+ per share, why would it allow a strategically critical asset to remain independently valued at only ~13–16x forward earnings?
That is where the Savage situation becomes particularly relevant.
