Beyond Meat Has Bottomed
Beyond Meat priced its initial public offering at $25 and sure it’s stock surge to $240. Beyond Meat, a maker of plant-based meat products is still new IT THING on Wall Street and sold at a supermarket and restaurant near you. Why the initial buzz, Beyond Meat had a first to market advantage, trailblazing a new secular movement away from animal protein.
But Beyond Meat became beyond over-valued. For example, at one point, the company had a sales to price ratio of 44 vs. Hormel Foods and Conagra with a sales to price ratio of 2.3 and 1.6, respectively. It was somewhat understandable, plant-based meats in the US still represents about 1% of the total meat sales in the US so the total addressable market is huge.
But there first to market advantage quickly eroded with the competition wanting a piece of the pie too.
Kellogg (K) introduced “Incogmeato,” which is a plant-based meat alternative made from non-GMO soy. Kellogg’s plant-based burger patties, Chik’n tenders, and Chik’n nuggets which go on sale this year.
Kroger said they will sell a new line of branded plant-based burgers, other meatless products like dips, pasta sauces and cookie dough in the coming months under their Simple Truth Plant Based label.
Hormel Foods announced its plant-based meat substitute called “Happy Little Plants” is available at select retailers.
Impossible Foods launched the Impossible Burger through Burger King.
Investors eventually came to their senses and stock sold off and sold off and sold off. Two months ago was also the first time since the IPO that insiders can sell the stock. At that time, roughly 75% to 80% of the outstanding stock was available to trade after the lockup expiration. Beyond Meat has now finally bottomed at the weekly demand at $81.
McDonald's (MCD) on Wednesday said it would expand its test of a Beyond Meat (BYND) plant-based burger in Canada, a small step toward what an analyst said could send Beyond Meat stock on yet another tear higher on epic sales gains in the years ahead, even as questions remain about its ability to meet demand.
Were McDonald's to introduce the P.L.T. in the U.S., Beyond Meat's sales could soar to around $910 million in 2021, up from around $280 million last year, Bernstein analyst Alexia Howard said in a research note.
Rival Impossible Foods, best known for its plant-based Impossible Burger, has also decided it is too small to make McDonald's worth pursuing. The company's CEO, Pat Brown, told Reuters in a story published Tuesday that "it would be stupid for us to be vying for them right now."
China’s hog herd, the biggest in the world, has plummeted as farmers killed off inflicted animals. Analysts forecast the loss of some 150 million to 200 million pigs in 2019, which Tyson said threatens 5% of the global protein supply. So in early 2019, China made its biggest purchase of the pork from the U.S. in nearly two years as African swine fever reduced hog herds and drove up prices. Now China’s meat substitute industry has seen a surge in interest in recent months.
While Beyond Meat sells its products in Taiwan, Singapore and Hong Kong, Beyond Meat now has their sights aim at starting production in Asia before the end of next year, so the timing is perfect.
If $81 was truly the bottom, the chart suggests, price will climb at least to the $140 level in the coming months.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
I would love to see Beyond Meat go bankrupt. :)
Chemical slop burgers masquerading as a better choice.
They won't go bankrupt, it's an over- hyped movement at this point.
To listen to the audio version of this article click on the play image.
Brought to you by @tts. If you find it useful please consider upvoting this reply.