Truist Securities analysts initiated Oatly Group AB shares at buy with a $35 price target, calling the plant-based food company’s strategy its “biggest asset” and the main reason to own the stock.
“With the recent completion of the $1.4 billion IPO, the company now has the fuel to accelerate the strategy which we believe will result in top-line growth well above our initial estimates for years to come,” wrote Truist analysts led by Bill Chappell.
Launched more than 25 years ago, Oatly follows other plant-based dairy alternatives like soy milk, that was created in 1896 but only became commercially popular starting in the 1980s, and almond milk, Truist says. The company spent a decade fine-tuning its core Oatly oat-milk product.
Then the company built a brand that, from the outset, was focused on the environment, making “sustainability the core focus of its brand message,” a message that, alongside healthy living, has big appeal to Gen Z customers.
“We believe this messaging is a key reason why Oatly and oat milk in general is re-energizing the overall…