Beyond Meat stock has fallen about 14% so far this year.
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It’s been a difficult month for Beyond Meat, and at least one bull is lowering her expectations a bit for the plant-based protein maker’s shares.
Beyond Meat stock (ticker: BYND) fell 1.1% to $106.07 in recent trading Tuesday, after falling more steeply this morning. The company reported downbeat earnings results on Friday, and many skeptics were busy lowering their price targets on Monday. In addition, a California court ruled that Beyond Meat must pay supplier Don Lee Farms in their contract dispute.
Separately, Beyond Meat said Tuesday that it is partnering with online marketplace Thrive Market. Customers will be able to buy the company’s products, like the Beyond Burger and meatballs, as well as single-serve meals featuring these products.
Citigroup’s Wendy Nicholson maintains a Buy rating on the shares, but she lowered her price target to $165 from $184 on Tuesday. She had upgraded the stock in March, but has since argued that investors may need patience with the shares. She believes the stock should trade at 14 times her 2022 sales estimate of $813 million, citing increased investment needs. That’s down from 20 times previously. (Her note was published before Beyond’s Thrive Market announcement.)
“We believe Beyond Meat can make up for lost sales in the first quarter relative to our forecast throughout the balance of the year and are not adjusting our full-year 2021 sales target at this time,” she writes. “However, we believe Beyond Meat will spend more to reinvest in its business behind innovation and in new markets,” which leads her to lower her full-year estimate for earnings before interest, taxes, depreciation, and amortization (Ebitda).
While disappointing sales have hurt the stock in recent quarters, Nicholson is still confident about the company’s strong brand recognition, wide portfolio of products, a growing market for plant-based protein, and value partnerships with restaurants.
Beyond Meat shares are off by nearly half from their October highs. Year to date, the stock has fallen 14.2%, and it has dropped 21.7% in the past 12 months.
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