UPDATE: Guggenheim Starts Oatly Group AB (OTLY) at Buy
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Guggenheim analyst Laurent Grandet initiates coverage on Oatly Group AB (NASDAQ: OTLY) with a Buy rating and a price target of $32.00.
The analyst commented, "Following the initial public offering on May 20, we are initiating coverage on OTLY shares with a BUY rating and a $32 price target assuming a 10x multiple on our discounted CY23 sales estimate. We think Oatly is uniquely positioned with a defensible market position thanks to (a) its emphasis on sustainability, (b) a science-based and manufacturing competitive advantage, and (c) disruptive marketing with a unique “in-your-face” brand message to challenge the status quo. 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. We see FY21 as a transition year with significant capex investments to double capacity, gross margin contraction from a less favorable manufacturing mix to help service volume demand, and higher SG&A expenses from becoming a public company."
Shares of Oatly Group AB closed at $28.73 yesterday.
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