OTLY - Oatly downgraded at Credit Suisse amid uncertainty in European Asian markets

Oatly Group ( NASDAQ: OTLY ) shares slid sharply in Tuesday’s premarket trading as Credit Suisse reduced its rating on shares to “Neutral” from a prior “Outperform”.

In the downgrade note, the bank’s analysts indicated that the higher rate of inflation in the Swedish company’s home continent could significantly impact sales and lead to weakened margins. While double-digit price hikes came into effect in August, those could have the adverse impact of decreasing sales as competitors hold back on price increases, in the bank’s view.

Meanwhile, “sporadic China lockdowns” were cited as a notable factor inhibiting retail expansion in the attractive market. At the very least, results are expected to remain “choppy.”

Finally, the note highlights liquidity concerns for the dairy alternative producer, suggesting the company will need to raise money via debt offerings in the near term.

Shares of the Malmö-based company fell 2.12% in premarket trading on Tuesday. The stock has declined over 80% in the past year.

Read more on the company’s most recent earnings release .

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