BTIG Positive on Beyond Meat's (BYND) Expanded Partnership With McDonald's (MCD), HSBC Upgrades to Hold

January 21, 2022 9:04 AM EST
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Price: $28.63 +9.40%

Rating Summary:
    4 Buy, 15 Hold, 9 Sell

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    Up: 11 | Down: 19 | New: 11
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Beyond Meat (NASDAQ: BYND) gapped higher yesterday on news that McDonald’s (NYSE: MCD) is expanding a joint pilot program with the company.

McDonald’s is expanding the plant-based McPlant burger created with Beyond Meat to roughly 600 locations from the current 8.

BTIG analyst Peter Saleh reiterated a Neutral rating following the report but reflected in a positive manner.

“While we believe the sales benefit will be nominal for Beyond Meat in 2022, we believe this moves the product one step closer to a national launch, which could be worth several hundred million dollars. We applaud Beyond Meat's innovation, and increased distribution through McDonald's, KFC and eventually Pepsi, but await more concrete details on margin impact and sustainability of sales before becoming more constructive,” Saleh said in a client note.

Moreover, HSBC analysts Jeremy Fialko and Carlos Laboy upgraded BYND to Hold from Reduce with a $62.00 price target.

“We believe Beyond Meat is putting itself in a difficult position. The group is investing heavily in transforming the business from an asset light co-packer brand to a much more intensive end-to- end producer (all the while expanding base material capacity) which will mean that the next couple of years are heavy years of investment. At the same time, growth has stalled in a number of key markets. In US retail there is evidence that Beyond has been losing share to Impossible (which tends to perform better in taste tests) and as reported by a number of alt- meat players – there appears to have been a slow-down in the broader category,” analysts wrote in a report today.

BYND stock price is up 0.3% in pre-open Friday.

By Senad Karaahmetovic | [email protected]

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