Oatly
Dreamstime
Shares of Oatly turned around after suffering losses earlier Tuesday when analysts at Truist, J.P. Morgan and BofA Securities cut their price targets on the stock following the company’s reduced revenue forecast and third-quarter sales miss.
Truist cut its 12-month price target to $15 from $25 earlier but maintained its Buy rating, and J.P. Morgan cut the target to $15 from $21. BofA Securities made the steepest cut, reducing its price target on Oatly (ticker: OTLY) to $11 from $32. It also lowered its rating to Neutral from Buy.
U.S-listed shares of Oatly gained 8.4% to $10.15 on Tuesday. Shares fell earlier Tuesday after closing at $9.36, down 21%, on Monday after disappointing earnings.
Oatly reported third-quarter sales of $171.1 million, missing analysts’ estimates of $185.6 million. The Swedish oat milk maker also lowered its full-year revenue guidance to above $635 million from $690 million. It cited a challenging supply-chain environment in the Americas and continuing strict public health measures in Asia.
“The 3Q21 miss and 4Q guide down is a perfect example of a company that hasgrown so fast and expanded so far that the management team cannot, presently, forecast the business,” said Truist analyst Bill Chappell.
The stock has trended downward since June, following its initial public offering. The sustainability-focused brand endorsed by big celebrities reported a loss of $32 million in the first quarter after it went public and $59 million in the next.
But Truist doesn’t see the plant-based trend going anywhere.
“It is too early in the company growth story, in the oat milk category growth story, and in the plant-based beverage growth story to abandon ship,” Truist’s note said, blaming the shortfall in sales and guidance to supply constraints and the timing of increased capacity and not due to lower consumer demand.
“We believe this is primarily a timing issue and in the first half of 2022, we expect to have an increased share of shelf space at retail given our strong velocities and current supply levels,” Oatly CEO Toni Petersson said.
Write to Karishma Vanjani at [email protected]
