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An old bull in Beyond Meat stock cut its Buy-to-Sell equivalent rating, bypassing Hold and joining most Wall Street analysts who are lukewarm or cold toward the fake meat startup.
Analysts do not usually downgrade stocks. Stocks are usually down one notch at a time, making Monday’s ratings change, according to Barclays analyst Benjamin Theurer, particularly noticeable. Theurer has had a buy rating on the stock since he launched the hedge in September 2019.
The analyst raised his target price for the stock.
Theurer does not believe that some of the coronavirus-induced trading difficulties associated with closing restaurants are adequately reflected in the stock price. About half of Beyond Meat’s (ticker: BYND) sales come from the food service distribution channel. According to the analyst, around 80% of sales abroad are generated outside the home, in restaurants.
Beyond Meat did not immediately respond to a request for comment early Monday.
Restaurant sales, of course, have been slashed by Covid-19. But Beyond Meat has been shifting volume to retail, offering new budget-style packaging. Still, it is not enough for Theurer to continue recommending stock.
Theurer’s original goal for the stock price was $ 185, when the stock was around $ 155. Since then, Beyond Meat’s stock has risen wildly, from about $ 160 a share, to $ 55 and going back to the current level of $ 141.68.
As time passed, its target price dropped to $ 100 per share. On Monday, it raised it to $ 115, approximately 19% below recent levels.
Overall, Wall Street is unsure about Beyond’s shares. Only three analysts rate the shares in Buy, while 17 have Hold or Sell ratings. The 15% buy rating ratio is well below the 55% average for stocks on the Dow Jones Industrial Average.
Valuation seems to be the main reason for the large percentage of pans. The average price target among analysts is approximately $ 100 per share, almost 30% below recent trading levels.
Barron’s He also struggles with Beyond’s rating. We chose the shares in May 2019, believing the price was too rich, while acknowledging the company’s strong business execution. Beyond’s shares are currently trading approximately 13 times more, above where other high-growth food companies have traded in the recent past.
Food pairs in the S&P 500 trade just over 2 times sales on average. Those companies, of course, grow much more slowly than Beyond.
Since that item appeared, with the stock price at about $ 100, Barron’s He has looked smart and stupid. The shares have been volatile, ranging from around $ 50 to $ 240.
Beyond stocks, it fell 2.8% to $ 137.78 in pre-trade. Dow futures were up 0.6% and S&P 500 futures were up 0.3%.
Year-to-date, Beyond shares rose approximately 87% to Friday’s closing price.
Write to Al Root at [email protected]
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