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Beyond Meat Unveils Value Product through Walmart and Target

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Beyond Meat (NASDAQ:BYND) stock surged 2.9% on Wednesday. The company will offer affordable burgers through major US retailers like Walmart (NYSE:WMT) and Target (NYSE:TGT). Amid the COVID-19 pandemic, Beyond Meat’s move to offer its plant-based or alternative meat products at lower price points might work in its favor.

On Wednesday, the faux meat maker announced the launch of Cookout Classic, which is a limited-edition value pack containing ten plant-based burger patties. The value pack will be available at most Walmart and Target stores and select US retailers. Notably, the product will be offered from June 22 until mid-August. Beyond Meat will offer the Cookout Classic pack at $15.99. Beyond Meat planned to launch value products that would help reduce the price difference between plant-based meat and animal meat.

The company also aims to attract customers through promotional offers on its products at major retailers, including Kroger, Amazon’s Whole Foods Market, and Shoprite. These offers will be made through July 4.

Beyond Meat’s expanded reach

Beyond Meat will expand its presence through new sales channels and geographies. In April, the company partnered with Starbucks (NASDAQ:SBUX) to offer Beyond Beef Pesto Pasta, Beyond Beef Classic Lasagna, and Beyond Beef Spicy & Sour Wrap in China. The company has been collaborating with several popular companies likes Yum Brands’ KFC and McDonald’s to expand its customer base.

In the first quarter, the company delivered better-than-expected revenue. An increase in the number of US retail and restaurant outlets helped drive the top-line growth despite the impact of COVID-19. Notably, Beyond Meat’s first-quarter revenue surged 141% YoY (year-over-year) to $97.1 million. The company’s retail revenue grew over 185%, while its foodservice net revenues increased 99.7% YoY.

Recently, the company announced its co-manufacturing facility with Zandbergen to produce the Beyond Burger and Beyond Sausage in Europe. The co-manufacturing facility will enable the efficient distribution of the company’s products in the EMEA region. Recently, the company acquired its first manufacturing facility in Europe in Enschede, the Netherlands.

Impressive rise in the stock

As of Wednesday, Beyond Meat stock has risen 106.7% YTD (year-to-date). The stock has significantly outperformed the broader market. The S&P 500 and the Dow Jones were down 3.6% and 8.5%, respectively, YTD as of Wednesday.

A change in consumer preferences, a shortage of meat amid the COVID-19 pandemic, and strategic deals make the company’s prospects strong. Also, continued innovation will likely boost the company’s sales more. However, increased competition in the alternative meat space is a concern.

Several analysts raised their target price for Beyond Meat stock following its first-quarter results. Currently, nine out of 19 analysts recommend a “hold,” five recommend a “buy,” and five recommend a “sell.” As of Wednesday, analysts’ average target price was $99.42 for the stock. The target price indicates a possible downside of 36% over the next 12 months.

Beyond Meat looks like an attractive long-term “buy” for investors who can ignore short-term disruptions due to challenging macro conditions amid the pandemic.

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