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Beyond Meat Stock Falls after Citigroup’s ‘Sell’ Rating

Rajiv  Nanjapla - Author

Jul. 24 2020, Updated 12:08 p.m. ET

Today, Wendy Nicholson of Citigroup initiated the coverage on Beyond Meat (NASDAQ:BYND) with a “sell” rating. She has given a target price of $123, which represents a fall of 12.9% from Thursday’s closing price. In her research note, Nicholson wrote that Beyond Meat is a market leader in plant-based meat, as reported by The Fly. 

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She said that the company is a well-known brand in the refrigerated meat sector and the food-service sector. However, she expects the company to face near-term and long-term pressure. Due to Beyond Meat’s exposure to the food-service sector, the company could experience near-term weakness. The food-service sector has been dealing with limited operations amid the pandemic. In the long term, increased competition could put pressure on the stock. So, Nicholson gave Beyond Meat a “sell” rating. 

Other analysts’ recommendations for Beyond Meat

Last month, Barclays downgraded Beyond Meat from “overweight” to “underweight.” However, Barclays raised its target price from $100 to $115. Benjamin Theurer of Barclays said that the company’s exposure to the foodservice industry increased to approximately 50% of its sales. The food-service industry will likely experience weakness in the near term amid the pandemic.

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Since the beginning of last month, Bank of America, UBS, and Credit Suisse have all raised their target price. As of today, analysts’ consensus target price is $104.48, which represents a fall of 26% from yesterday’s closing price. Meanwhile, Wall Street prefers a “hold” rating for Beyond Meat. Among the 19 analysts, 47.4% recommend a “hold,” 21.1% recommend a “buy,” and 31.6% recommend a “sell.” 

Beyond Meat’s stock performance

Today, Beyond Meat was trading 5.1% lower as of 10:15 AM ET. The “sell” rating from Citigroup could have led to a fall in the company’s stock price. So far, Beyond Meat has been spectacular this year. The stock has outperformed the broader equity markets. The company has returned 86.8% YTD, while the S&P 500 Index has declined by 2.4%. 

The strong performance in the first quarter, the introduction of innovative products, and its aggressive expansion drove the company’s stock price. Meanwhile, Tyson Foods (NYSE:TSN) and Kellogg (NYSE:K) have declined by 38.9% and 4.7%, respectively. 


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