© Reuters. FILE PHOTO: The neat factory is seen in Landskrona, Sweden May 20, 2021. TT News Agency / Johan Nilsson via REUTERS
By Praveen Paramasivam
(Reuters) – OFast Group (NASDAQ:AB) is expected to forecast strong sales growth for 2022 when it reports results on Wednesday as health-conscious consumers continue to shift. the company’s plant-based milk, in contrast to Beyond’s decline in demand. Meat (NASDAQ:).
Many restaurants and retailers have partnered with OFast in recent months to offer vegetarian options to customers. One of the biggest drivers, however, came from the U.S. oat milk supply agreement with Starbucks Corp (NASDAQ:).
As a result, Wall Street’s sentiments for Oedly are more favorable than for alternative meat producers Beyond Meat Inc The company has seen its sales growth weather the pandemic for a number of reasons.
“Beyond Meat did not significantly expand its distribution in the US over the past year… OFast sales growth is currently being driven by expanded distribution,” said CFRA Research analyst Arun Sundaram. .
Oedly is expected to supply 85% to 90% of Starbucks’ oat milk needs by 2022. CEO Toni Petersson said late last year the results of OFast’s oat milk operations at the coffee chain exceeded expectations.
According to MedlinePlus of the US National Library of Medicine, approximately 30 million American adults have some degree of lactose intolerance, making many of them a must-buy.
In November, OFast said it had opened its first manufacturing facility in Ma’anshan, China, just months after opening its first factory in Asia in Singapore, signaling its profit margins would improve. improved by increasing domestic production.
Analysts expect OFast to record a nearly 58% increase in revenue in 2022, with losses also down from 2021 levels. In contrast, Beyond Meat’s revenue is expected to grow only 27%.
Graphics: Has usurped Beyond Meat as the darling of Wall Street: https://graphics.reuters.com/OATLY-RESULTS/xmvjoeqlbpr/chart.png
Oedly has the second-highest expected revenue growth among its peers in terms of food and beverage growth, behind only the energy drink maker. C Holdings (NASDAQ: Inc.), according to broker Piper Sandler.
However, OFast will need to overcome potential mechanical and automation issues during increased production and broader supply chain disruptions to meet demand for milk, ice cream and yogurt. converted into sales.
Revenue for the fourth quarter is expected to grow 2% in a row, despite recalling some products and removing less than a million liters of inventory due to quality issues in November.
SENTIMENT WALL ROAD
** About 68% of analysts rated “buy” as Neat or better, compared with just 10% for Beyond Meat.
** OFast’s current average price target implies a 136% gain as of Monday’s close, compared with Beyond Meat’s 25%.
Fusion Media or anyone associated with Fusion Media shall not bear any liability for loss or damage resulting from reliance on information including data, quotes, charts and buy/sell signals contained in this site. Please be fully informed of the risks and costs associated with trading in financial markets, which are among the riskiest forms of investment possible.