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Motley Fool Issues Rare “All In” Buy Alert
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Shares of Oatly (OTLY -8.74%) continue their collapse today, dropping 10.1% as of 11:50 a.m. ET on Tuesday morning, on the continued fallout from a disappointing earnings report.
The Swedish oat milk maker reported third-quarter results last week that fell far short of expectations, and since then analysts have been lowering their price targets on the stock, even as they keep their generally bullish ratings on it.
Image source: Getty Images.
Oatly essentially created the oat milk category as an alternative to dairy, and though business boomed, it was unable to keep up with demand, which allowed rivals to enter in and take market share.
Earlier this summer, it brought on an executive from the Mars candy company, Jean-Christophe Flatin, to take on the role of global president with an eye toward eventually becoming CEO. Yet he has not been able to turn the business around yet.
Oatly reported revenues of $183 million versus consensus estimates of $212 million, generating losses of $0.18 per share compared to Wall Street’s expectations of losses of $0.11 per share. It also forecast full-year sales of $700 million to $720 million, far below the $798 million analysts were looking for.
Oatly has been impacted by a trio of problems: strict COVID restrictions in Asia, production problems in the Americas, and unfavorable currency exchange rates. Analysts also say it is suffering from a lack of demand among consumers.
All this is despite the fact that analysts at Cowen and RBC Capital both kept their outperform rating on the stock, while Mizuho kept its rating at neutral. All three lowered their price targets in recent days to a range of $2.50 per share to as high as $7 per share. At noon ET today, Oatly was trading at $1.64 per share.
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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