OTLY - Oatly is downgraded at JPMorgan to Neutral with growth story less clear
2023-08-02 07:02:53 ET
Oatly Group AB ( NASDAQ: OTLY ) slipped in early trading on Wednesday after JPMorgan downgraded the stock to a Neutral rating from an Overweight rating.
Analyst Ken Goldman and see a number of potential positives ahead for Oatly ( OTLY ), including a cleaner strategy in Asia, improving gross margins, a tighter middle part of the P&L statement, and incremental distribution gains ahead in the U.S. However, the firm is no longer comfortable recommending the stock given the level of uncertainty ahead. Softer Asia fundamentals than expected is considered to be a blow to the growth thesis on OTLY.
"While Asia should still be a longer-term growth driver for the company, it’s going to take longer than expected for revenues to reach prior targets, and our confidence that Asia can ever expand as quickly as previously hoped has been impaired."
JPMorgan's overall take is that there is not much visibility into where sales and EBITDA will go after 2023 for Oatly ( OTLY ).
Shares of Oatly ( OTLY ) fell 1.05% in premarket action on Wednesday.
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- Seeking Alpha's Quant Rating for Oatly
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Oatly is downgraded at JPMorgan to Neutral with growth story less clear