Teresa Rivas
Beyond Meat shares surge more than 7% early Monday following a double upgrade from Bernstein. The firm argues that despite the difficulties the plant-based protein maker faced during 2020, it isn't a "broken growth story."
Analyst Alexia Howard boosted her rating on Beyond Meat to Outperform from Underperform, and her price target to $130 from $101. Beyond Meat was up 4.3% to $111.20 before the open. The shares have fallen 14.7% year to date and are down more than 22% in the past year.
Howard acknowledges that the past year has been difficult for Beyond Meat. The public health crisis led to a hefty decline in people eating out -- an area where the company shines thanks to its high-profile partnerships. And rival Impossible Foods has made strides in expanding in the retail channel, where Beyond Meat's sales have failed to make up for the restaurant slump.
Expectations have come down as well. Wall Street's forecasts for 2022 revenue are about 35% below pre-2020 levels, although other analysts are also still bullish on the shares, despite their recent difficulties.
That is where Howard sees opportunity. Consumer demand for meat alternatives overall have held up well on a two-year basis, and Beyond Meat itself is telling investors to expect a recovery in organic growth in the second quarter, despite difficult year-over-year comparisons. Its restaurant sales should get a boost from people returning to dining out.
The analyst is also upbeat about the company's plans for the Netherlands, which will improve its costs in Europe, and the global opportunity its relationship with McDonald's (MCD) represents for next year and beyond.
Given that consumers are more focused on health and wellness post-2020, Howard thinks that the company's latest burger iteration, which has 35% less saturated fat than animal meat, will be a key driver going forward. "Overall, we believe that Beyond Meat should be recognized as a reopening play that stands to regain meaningful momentum over the coming quarters," she wrote.
Write to Teresa Rivas at teresa.rivas@barrons.com
(END) Dow Jones Newswires
May 24, 2021 09:38 ET (13:38 GMT)
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