Beyond Meat Stock: KFC Drove the Rally Yesterday


Aug. 27 2019, Updated 1:23 p.m. ET

On Monday, Beyond Meat’s (BYND) share prices rose 5.6%. In a press release, the company said, “Kentucky Fried Chicken®, the world’s most popular chicken restaurant, has done what no other quick-service restaurant (QSR) has done before. Tomorrow (August 27th), Beyond Fried Chicken™ will make its debut in a limited test, crowning KFC as the first U.S. national QSR to introduce plant-based chicken – a true Kentucky Fried Miracle.
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Beyond Meat stock rose on Monday

The news increased the company’s stock prices. On August 22, 7-Eleven Canada added Beyond Meat Pizza to its Hot to Go menu. 

Since the listing day, the company’s stock prices have risen 135.9%. General Mills (GIS) and Kraft Heinz (KHC) have returned 5.3% and -20.5% during this period. The Consumer Staples Select Sector SPDR ETF (XLP) has risen 5.9%, while the S&P 500 Index has fallen 1.3% during this period.

Among the six analysts tracking Beyond Meat stock, all of them recommended a “hold.” Since May, there haven’t been any “buy” recommendations. On August 20, J.P. Morgan changed its ratings on the stock to “overweight” from “neutral.” Following rating upgrade, the company’s stock prices closed 6.5% higher on the same day. J.P. Morgan also increased the target price on the stock by $1 to $189.

China could be important

On Monday, Beyond Meat’s stock prices closed 7% and 7.9% below their 20-day and 50-day moving average. So far in August, the stock prices have fallen 21.1%. The escalation in the US-China trade war could be behind the lower stock prices. However, China could be an important market for Beyond Meat. China has the largest appetite for meat in the world. China is the largest pork consumer in the world, according to the USDA. The Chinese pork market was important for US pork exporters before the trade war. On average, Chinese people will consume 55 kilograms of meat per year in 2026—10% higher than the consumption in 2017. Pork is estimated to account for 60% of China’s total meat consumption.

Institutional holdings and target price

Vanguard Group holds about 1.05 million Beyond Meat shares. Notably, Vanguard Group was the largest institutional investor. Blackstone Group, FIL, BlackRock, and Jane Street are the other top institutional investors. Institutional investors have a total stake of 9.39% in Beyond Meat. In the next year, Beyond Meat’s mean target price is ~$165.42, which implies a potential upside of ~6.6% from its last closing level.

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