A Piper Sandler analyst lowered his rating on the stock after it fell on Wednesday over concerns that the plant-based meat manufacturer may not meet high expectations. The price cut of rival Impossible Foods also weighed in the shares.
Analyst Michael Lavarie cut his rating on Meat (Ticker: BYND) from overweight to neutral and ranged in value from $ 144 to $ 125. While he still thinks Beyond Meat would benefit from being an early leader in Fox Meat – a range of potentially over $ 8 billion by 2025 – he believes consensus estimates are currently too high , And the company’s fourth quarter sales may once again disappoint.
Retailers have been warned by Lawrie that Beyond Meat, which reported lower-than-expected sales in its third-quarter earnings report, could face a similar problem with its fourth-quarter numbers, a The pattern that may remain this year. They believe the consensus estimate for revenue will have to be reduced.
However, he is less concerned about other aspects of the company’s business.
The (MCD) McPlant initiative will be an opportunity for Beyond Meat, even as historically McDonald’s has rarely highlighted brand partnerships with suppliers. Stocks fell on an initial announcement in November as the restaurant giant did not say it would use Beyond Meat. Nevertheless, Lavery writes that there is a chance that Beyond Meat may get a brand bump from McDonald’s. He writes that partnering for meat beyond this is valuable, even though its “visibility is not as powerful as the ‘impossible whopper’ in Burger King, certainly.”
Lavari has a look at the growing competition, though he is not as concerned about it as some bears are. He notes that Beyond Meat and privately held Impossible Foods have gained ground, with more established players, such as
(K) Morningstar Farm, also able to grow. This is because “new entrants can validate the category with consumers and help create wider visibility. We believe the dynamic may be similar to that of beverages, where
(Co 0) and
(PEP) Both can benefit from the other’s spending on the category. “This is a theory that supports other analysts as well.
Competition for meats is still low to attract more sales than meat. Impossible Foods today announced its second price cut in a year, as it looks at juice sales. The company said the move is priced at about $ 6.80 per pound, yet the beef burger costs $ 2 to $ 3 more, but 15% less than its former level.
Beyond Meat is down 2.4% to $ 123 in recent trading.
Write Teresa Reeves at [email protected]