Oatly Divides Analysts Who Love the Story, But Maybe Not Quite Yet

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Oatly Divides Analysts Who Love the Story, But Maybe Not Quite Yet
Credit: © Reuters.

By Christiana Sciaudone

Investing.com -- Oat milk anyone? Hm, maybe.

Most analysts appear to be into the alt-milk drink, while others not so much.

Shares fell some 3%.

Piper Sandler is firmly in the buy camp, saying its brand equity and pricing power set it apart and warrant a valuation premium. 

The total addressable market size is "significant" and Oatly should continue gaining share, only limited by capacity. It also has solid (buzz term!) ESG credentials, boasting 80% less carbon emissions and 60% less energy usage versus cow's milk, analyst Michael Lavery wrote in a note according to StreetInsider. He set a price target of $30.00.

Guggenheim also called Oatly a buy, with a $32 price target, similarly calling it "uniquely positioned with a defensible market position" thanks to its sustainability focus and a disruptive marketing with a unique “in-your-face” brand message to challenge the status quo, analyst Laurent Grandet said in a note, StreetInsider reported.

"In our view, the company is in the early stages of a long-term growth story that could generate double-digit annual sales growth for at least the next 10 years if it continues to invest heavily in capacity expansion," Grandet said. 

RBC Capital, meanwhile, initiated coverage at a neutral-equivalent, with a price target of $28. Analyst Nik Modi said, "Our rating is less about our belief in the Oatly growth story and more about taking a measured approach to stock-picking based on the company’s current growth-related challenges (capacity buildout that could delay profitability timeline)."

 Exane BNP Paribas (OTC: BNPQY ) and Oppenheimer also gave the stock a neutral-equivalent, with the latter citing valuation as a reason to remain on the sidelines, for now.

Sweden-based Oatly went public in May, raising $1.4 billion.

 

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