Analysts Are Updating Their Oatly Group AB (NASDAQ:OTLY) Estimates After Its Second-Quarter Results

It's been a sad week for Oatly Group AB (NASDAQ:OTLY), who've watched their investment drop 17% to US$0.97 in the week since the company reported its quarterly result. It looks like the results were pretty good overall. While revenues of US$202m were in line with analyst predictions, statutory losses were much smaller than expected, with Oatly Group losing US$0.05 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Oatly Group

Taking into account the latest results, the consensus forecast from Oatly Group's eight analysts is for revenues of US$833.9m in 2024. This reflects a satisfactory 5.2% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 52% to US$0.26. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$830.0m and losses of US$0.28 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

There's been no major changes to the consensus price target of US$1.97, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Oatly Group analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$1.05. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Oatly Group'shistorical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.9% annually. So although Oatly Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$1.97, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Oatly Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Oatly Group analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Oatly Group that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com