Amid COVID-19, Beyond Meat (NASDAQ:BYND) stock declined to a low of $48.18. Since then, the stock has increased by 125.8% to $108.78. The company’s new partnership with Starbucks (NASDAQ:SBUX) in China and the stronger broader equity market led to a rise in the company’s stock price. However, UBS analyst Steven Strycula doesn’t think that the levels are justified. Today, he downgraded the stock from “hold” to “sell” and cut the 12-month target price from $90 to $73. His new target price represents a fall of 32.9% from the closing price on April 24.
As reported by TheStreet, Strycula stated that the company’s stock price has already accounted for the benefits from its recent partnerships with McDonald’s (NYSE:MCD) and Starbucks. However, the stock price hasn’t priced in the risks of a decline in traffic, the economic impact of COVID-19, and increasing competition. Strycula lowered his sales expectations for this year and next year. He cut the sales expectations for 2020 by 6% to $471.4 million. He expects the company’s sales in the restaurant and foodservice segment to fall by 24%, while the retail segment’s sales could increase by 17%. For 2021, he cut his sales estimates by 8% to $694.8 million.
Other analysts’ recommendations
Analysts have expressed mixed opinions about Beyond Meat this month. On April 2, D.A. Davidson upgraded the stock from “underperform” to “neutral.” However, the firm reduced its target price from $84 to $62. On April 17, Bank of America raised its target price from $50 to $58. However, Credit Sussie, JPMorgan Chase, and Piper Sandler cut their target prices. Last month, Goldman Sachs downgraded the stock to a “sell” rating. To learn more, read Beyond Meat Stock: Goldman Sachs Turns Bearish.
Overall, analysts favor a “hold” rating for Beyond Meat. Among the 18 analysts, 61.1% recommend a “hold,” 22.2% recommend a “buy,” and 16.7% recommend a “sell.” As of April 24, analysts’ target price is $80.38, which represents a fall of 26.1% from the closing price.
Beyond Meat stock rose
Despite UBS’s downgrade, Beyond Meat is trading in the green today. At 10:50 AM ET, the company was trading at $110.40, which represents a rise of 1.5% from the previous day’s closing price. There’s optimism in the broader equity markets due to opening the economy, which led to a fall in the company’s stock price.
Meanwhile, Beyond Meat is still trading over 50% lower than its 52-week high of $239.71. New players, like Tyson Foods (NYSE:TSN), Nestle, The Kellogg Company (NYSE:K), Hormel Foods, Kroger, and Cargill, in the alternative meat space have been putting pressure on the company’s stock price. However, Beyond Meat has been looking at strategic partnerships with restaurant chains to increase its sales.