According to data compiled by S&P Global Market Intelligence, Oatly (OTLY 4.08%) shares lost more than 11% of their value across this week. That wasn't entirely unexpected, as two analysts cut their price targets on the stock, and quite drastically.

Recommendations unchanged

The more aggressive reduction was made by Piper Sandler's Michael Lavery, who on Wednesday chopped his Oatly fair value assessment to $16 per share from $40. Despite the severity of the move, Lavery remained bullish on the company, as he maintained his by recommendation on the stock.

According to reports, the analyst adjusted his forecast for sales, to roughly $830 million for this year from his previous estimate of $835 million. He made a similar $5 million adjustment to his 2026 projection too; it now stands at $890 million.

Although he expects lower sales, Lavery is still encouraged by the company's recent moves to drive profitability. He feels these will notably improve its margins.

The Piper Sandler pundit wasn't the only Oatly watcher trimming their price target. Morgan Stanley's Dara Mohsenian made a similar move with nearly the same intensity. In her view, the stock is now worth $10.20 per share, well down from her previous level of $23. Like Lavery, she left her existing recommendation intact, only in her case it's equal weight (hold).

The less-encouraging type of stock split

Becoming more bearish on Oatly is understandable, as the company's most recent earnings report didn't exactly captivate the market. And since issuing it, the company has effectively enacted a 20-for-1 reverse stock split, which is almost never an indication of a well-performing business. I would be very cautious about investing in this company.