Beyond Meat Inc (BYND)

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Beyond Meat's Expansion Continues. Next Stop: Wawa, a 'Cult Favorite.' -- Barrons.com
11:32 am ET July 31, 2020 (Dow Jones) Print

By Al Root

Beyond Meat products are going into the very popular regional convenience chain Wawa. It's another bit of good news for the alternative meat startup.

Any product expansion is noteworthy, but Wawa is special. It has a devoted base of fans who sing the praises of its sandwiches. Wawa, however, is also regional. Investors might not realize the power of the its brand.

Consider Wawa has more than 360,000 Twitter followers. 7-Eleven has about 125,000 followers. But Wawa has about 900 locations, while 7-Eleven has about 8,000.

"Wawa is a cult favorite brand and we're excited to partner with them to introduce several new breakfast options made with Beyond Breakfast Sausage," said Beyond (ticker: BYND) Chief Growth Officer Chuck Muth, in the company's news release. "These new on-the-go options not only taste great, but will make plant-based meat more accessible to more consumers."

In addition to Wawa, Beyond has been active in 2020, adding locations in China with Starbucks (SBUX) and Yum China (YUMC), among others. Business execution through the pandemic appears solid.

Overall, Beyond Meat products are available in about 94,000 retail and restaurant locations in 75 countries worldwide.

Business execution isn't why Barron's panned Beyond Meat stock back in May 2019. We have a valuation issue. Beyond trades for about 11 times estimated 2021 sales. It's growing rapidly, but its valuation is far beyond what food peers trade for.

Wall Street has its reservations about the stock, too. Only about one in five analysts rate shares Buy. The average Buy-rating ratio for stocks in the Dow Jones Industrial Average is about 55%. Not to mention the average analyst price target is about $110 a share, below where the stock is trading today.

Since that Barron's story appeared, Beyond shares have been volatile. Shares closed the year at about $75 a share, down roughly 25% from Barron's pan date.

Shares, however, have been on a tear in 2020, rising about 64%, far better than comparable returns of the Dow index and S&P 500 over the same span.

Shares are up 0.2% in early trading Friday. The S&P, for comparison, is down 0.4%.

Write to Al Root at [e-mail]

(END) Dow Jones Newswires

July 31, 2020 11:32 ET (15:32 GMT)