According to Credit Suisse, a tough road lies ahead for Oedly. Analyst Kaumil Gajrawala downgraded the stock to neutral to better and reduced his price target to $3.43 from $6, roughly the same as the stock closed Monday at 3. 30 dollars. Shares fell 0.6% in pre-market trading Tuesday. “We downgrade stocks to Neutral in light of what is believed to be a particularly volatile consumer environment in Europe and Asia,” Gajrawala wrote in a note Tuesday. Gajrawala added: “Inflation and unpredictable lockdowns have hurt their ability to compete with more capable peers. Shares are down about 58% this year and down about 82 % from a 52-week high, but the Swedish dairy substitute is dealing with the effects of larger inflation in Europe that will be more severe than elsewhere, according to the Notes. recent inflation was +9% y/y and could move higher as energy demand increases. Retail data shows consumers are shifting to private brands, and management cited fewer new customer trials/conversions (growth) from dairy,” the analyst wrote. The analysis also indicates that an immediate shutdown of China will further hinder OFast’s overseas expansion plans, as well as the difficulty of weathering the surge in oat milk prices in the US. Gajrawala writes: The double-digit price increase came on 8/1 with August retail data showing oat milk production (EQ) plummeting to +1.5%, down from +11% in the L12 week. Gajrawala added: “Even if demand for plant-based milk is sustainable, we think widening the price gap amid hot inflation could trigger a transition. It’s too early to tell if there’s a long-term impact.” — CNBC’s Michael Bloom contributed to this report.