Cubbie, I also own AMC, be careful there. BYND is really the place to be!
Beyond Meat Stock Is Rising Because One Analyst Says the Rally Will Continue -- Barrons.com
10:11 am ET March 19, 2021 (Dow Jones) Print
Teresa Rivas
Beyond Meat is popping Friday, on the heels of a bullish initiation from Stephens. The firm argues that the market for faux meat will continue to grow rapidly and the biggest players in the space will reap the lion's share of the rewards.
Analyst Mark Connelly initiated coverage of Beyond Meat (ticker: BYND) with an Overweight rating and $190 price target: "Alt Protein went from a novelty to one of the most successful new food product launches in history in just two years. Now it is going mainstream." The price target implies nearly 40% upside from the current Beyond Meat stock price.
He acknowledges that the Covid-19 pandemic caused growth to slow last year -- recall Beyond Meat's big sales disappointment in November -- as restaurant demand remained lackluster and retail sales underwhelmed. Yet he argues that "the foundation continues to strengthen."
Connelly believes that penetration in the retail channel is growing more quickly than naysayers believe, especially with Beyond Meat's international business expanding rapidly this year -- alternative proteins can go a long way to addressing China's food production challenges. This trend will be strengthened by the company's ongoing innovation, which allows its products to reflect both consumer and restaurant demands.
Of course, the huge explosion in demand for faux meat hasn't gone unnoticed, and competition has only intensified in the industry. That said, Connelly argues that "Beyond is one of only two companies that we think will define the high end of the market." More entrants to the space help raise consumer awareness overall of plant-based protein, while Beyond looks well positioned given it has a half-decade head start in creating its brand.
Moreover, while naysayers argue that Beyond Meat products aren't healthy, Connelly notes that the sodium in the patty isn't the main culprit when it comes to salt content in a burger -- it's the bun and condiments; also Beyond Meat and other companies are working to improve their health profile too, even as "plant-based burgers are already healthier overall." Nutrition may not be your first thought when ordering fast food, but faux meat's health profile can help attract new, highly desirable demographics, like women and more highly educated diners, to restaurants.
As of now, plant-based proteins are pricier than meat -- largely because major government subsidies for the latter -- but Beyond Meat and other companies are making progress. "Ag and ingredient specialists are already getting close to bringing new solutions to bear that will reduce cost and complexity," he notes.
Beyond Meat stock is up 1.7% to $136.00 in recent trading. The shares have gained 8.8% year to date and are up more than 130% in the past 12 months. Other analysts are also getting more bullish on the stock.
Write to Teresa Rivas at teresa.rivas@barrons.com
