Oatly: From A Broken IPO Story To A Compelling Investment

Oatly is rated Buy with a $22 price target, reflecting operational turnaround and accelerating revenue growth. Gross margin improvements and positive adjusted EBITDA signal progress, though FCF remains negative and profitability is not expected in FY26. Key catalysts include the potential China segment carve-out and US product launches, both of which could materially improve financials and growth. Risks center on sustained negative FCF, high leverage, and dilution from convertible debt, but recent execution supports a constructive outlook.

I have already written two articles about Oatly (OTLY), the world’s largest oat drink company. In my recent article, I gave Oatly a Buy rating, as I saw the company on track with its