Shares of Beyond Meat (BYND) are under pressure on Tuesday after JPMorgan analyst Ken Goldman downgraded the stock to Neutral on valuation. With the stock at around $168, seeing more upside "requires assumptions" that the analyst is "not yet comfortable with."
MOVING TO THE SIDELINES: In a research note to investors, JPMorgan's Goldman downgraded Beyond Meat to Neutral from Overweight, while raising his price target on the shares to $121 from $120. The analyst believes the "extraordinary revenue and profit potential" is already embedded in Beyond Meat and notes that with the stock at around $168, seeing more upside "requires assumptions" the analyst is "not yet comfortable with."
Goldman remains "highly favorable" to the total addressable market for alternative meat and Beyond Meat's role within it, and still thinks consensus estimates for both sales and EBITDA are "too conservative." However, the analyst believes not all of the news flow will be positive as competitors get more aggressive and the lockup period expires in late October. Overall, Goldman argued that the company’s growth opportunity, "strong" management, and near-term ability to post financials that exceed Street expectations are balanced by elevated valuation metrics.
WHAT'S NOTABLE: Beyond Meat announced that it will release the latest version of the Beyond Burger, the brand's flagship product, at grocery stores nationwide. According to the company, the new, meatier Beyond Burger features marbling designed to melt and tenderize like traditional ground beef. Made using a blend of pea, mung bean and rice proteins, the blend provides a "meatier taste and texture that mimics the chew and juiciness of beef." The move comes as Tyson Foods (TSN) and Nestle (NSRGY) prepare to launch their own plant-based meat alternatives.
PRICE ACTION: In morning trading, shares of Beyond Meat have dropped over 19% to $135.55.
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