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Investing.com - DA Davidson has lowered its price target on Oatly Group AB (NASDAQ:OTLY) to $14.00 from $17.00 while maintaining a Buy rating on the stock. Oatly currently trades at $11.72, down more than 11% over the past week and 16% over the last year, according to InvestingPro data.
The firm cited "greenshoots within the portfolio" including acceleration in Europe and distribution gains in North America, which are currently being overshadowed by near-term headwinds such as customer attrition. These challenges come as the company operates with a significant debt burden of $547.58 million and a concerning current ratio of 0.42.
DA Davidson believes Oatly could achieve mid-single digit total revenue growth by the second half of 2026, which would yield concurrent margin expansion due to volume throughput.
Despite maintaining its Buy rating, the firm acknowledged a "’show me’ component" that investors may require before fully embracing the stock’s potential.
The research note also indicated that broader multiple contraction in the Food sector could keep Oatly’s stock range-bound for some time despite the positive long-term outlook.
In other recent news, Oatly Group AB reported its first profitable quarter since going public, marking a significant milestone for the company. The company’s revenue increased by 7.1%, reflecting positive growth in its financial performance. Additionally, Oatly achieved a positive adjusted EBITDA of $3.1 million, highlighting its progress towards financial stability. These developments come amid a slight dip in stock price, although premarket trading showed a positive trend. Investors may find these results encouraging as they indicate a potential turnaround in the company’s financial health. While specific analyst upgrades or downgrades were not mentioned, the earnings performance itself is a key focus for investors. These recent developments underscore Oatly’s ongoing efforts to improve its financial standing and market position.
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